When the National Advisory Council (NAC) was preparing the draft legislation on the right to employment, it had, in the words of one of its key members, Jean Dreze, to ‘considerably dilute provisions’. This is obvious when one notes that the framework under the National Rural Employment Guarantee Act (NREGA) is currently limited to the provision of 100 days of paid work per family, pegged to outdated minimum wages and has no safeguards against inflation, especially its effect on items consumed by the poor, such as food. The NREGA, as enacted, is, in fact, regressive when compared with the provisions in earlier interventions such as the Employment Assurance Scheme or the Maharashtra Employment Scheme.

Despite the rhetoric of conferring a historic right to employment, the government did not allocate an adequate budget to make the rights real. The excuse given was that there was no need for it, as the scheme is demand driven. Thus, even while the NREGA was being enacted, the whole exercise, which was supposedly intended to tackle a huge and growing unemployment gap, was trimmed in a manner so as not to exceed greatly the budgetary allocations made for the activities of the Ministry of Rural Development. This stance was taken even during the recent expansion of the NREGA budget, where the budgetary provision was increased by only 47 per cent to Rs 15,000 crores, up from Rs 10,200 crores, whereas the scheme itself was extended to 550 districts from 200 districts, more than doubling the number of districts.

The NAC had opined that a full-fledged employment scheme for rural areas would need about Rs 40,000 crores annually. With the central government demonstrating growing revenue buoyancy, making such a budgetary provision was easily possible. However, as we have seen, funds allocation for the first year of the NREGA, covering 200 of the poorest districts, was only Rs 10,200 crores, and a mere Rs 15,000 crores was allocated for the third year. In contrast, it is useful to consider the funding strategy for the Maharashtra Employment Scheme. Under this scheme, funding was not linked to provisioning by the state government. The scheme accessed resources secured from earmarked taxes and realised from specific revenues, such as octroi and professional tax. This made the budget independent of government whims and, because the officials knew well in advance the resources available, they were able to carry forward surpluses. This led to assured and considerable amounts of money being available for implementing the scheme in Maharashtra.

There are many worrying implications of the budgetary provisions under the NREGA. First, the provisions made for the administrative costs are low even when it is well known that employment schemes have high administrative costs. This has led to states employing a retinue of staff for undertaking administrative work and disguising them as wage seekers. Thus, all mates, and field and technical assistants working to oversee implementation are included as being employed under the NREGA. Second, a major concern is that the employment schemes do not create assets or additional avenues of employment. This is because few resources are provided to employ capable persons to identify works and ensure quality output through the prescription, supervision and enforcement of benchmarks and standards, or to assist panchayats in developing the necessary infrastructure to deliver on their responsibilities.

In Andhra Pradesh, house construction is being funded even though it is not in the list of permissible works under the NREGA; tank soil is being carted, but no steps are taken to ensure attendant services to enhance soil nutrition or productivity; and bio-diesel plantations are not being provided with water supply, leading to their dying within months of plantation.

In short, the money being made available to implement NREGA falls far short of the amount required. Even the little obtained is diverted as wages to non-workers or is spent on wasteful investments. If the implementation of the NREGA continues to proceed on these lines, very soon even this support will be seen as unproductive and the scheme dumped.          

It is vital that the polity and civil society make all efforts to see that the NREGA serves its intent. If such commitment is assured, the financial outlays and human resource skills will not fall short. When Prime Minister Dr. Manmohan Singh formally launched the NREGA at Bandlapalli village of Ananthpur district in Andhra Pradesh, Smt. Sonia Gandhi reminded everyone of Indira Gandhi’s famous slogan, ‘Garibi hatao’. She said that the aim of the NREGA is ‘Berozgari hatao’. The public was enthused by these words and expected to see the government demonstrate commitment and energy. However, the government’s commitment and energy were very short lived.

The Union budget must be examined, in the context of the NREGA, not only to see what amount is provided and how it is planned to be used, but to review it from the perspective of the wage seeker. For instance, one simple principle by which the NREGA can be judged is to see whether income earned through NREGA schemes amounts to additional income for workers, as it is intended to be. If workers are employed in government works under the NREGA that do not contribute to or supplement their overall income, it is of no use to the worker, whatever other use the same may be.

A ‘worker’ is a wage seeker under the NREGA. The point being raised here is that the NREGA is not only meant to be an avenue for work but truly intended to provide additional income. Just because people may secure employment in ongoing government works under the NREGA schemes does not mean the principle of additional income is being addressed.

Another drawback with the NREGA is that it is implemented totally with central government resources, save a small percentage allocated for materials and the cost of disbursing unemployment allowance, which are to be provided by the relevant state. This is so because no state will implement the NREGA if they have to provide a considerable share for the scheme. As it is, states currently employ all available methods to deny unemployment allowance to workers even though it is explicitly provided for under the Act. In Maharashtra, not a single payment of unemployment allowance has been made despite the law having been implemented for over 30 years.

The NREGA, when seen from a worker’s perspective, reveals that the income generated through it is very little. With the emergence of mechanisation and modern farming practices, traditional agricultural employment is falling sharply. For instance, combined harvesters and threshers undertake most agricultural harvesting; insecticides are available to stop the growth of weeds; and many farmers are cultivating crops for which they can use household labour. But no policy or mechanism on how this loss of employment can be compensated through the NREGA is being considered.

As regards implementation of the NREGA, the performance of most states has been dismal in that the number of days of employment provided in most cases does not exceed even half the number of days of assured employment required to be provided by law. Andhra Pradesh, which is claimed to be a model for the NREGA, has provided not more than 42 days of employment during the last fiscal year. Also, of these, over a third were direct transfers to households for housing. Analysis of the Andhra Pradesh government website further reveals that the bulk of those who received money never came back to seek wage employment under the NREGA. Even the works taken up under the NREGA are centred on economic growth rather than employment generation, resulting in the assets being invested in the NREGA not having the potential to generate employment. Rajiv Gandhi said that only twelve paisa of every rupee invested in development reaches the intended people. He was worried by the wastage and leakage. We ought to be concerned about the effective realisation of the right to employment and that of workers’ expectations of earning additional income.

As such, budget analyses must focus not only on how many crores are allotted to schemes under the NREGA, but also on whether the budgetary provisions lead to a new and positive gain for the workers. Only then can we understand, utilise and reshape the budget in a manner that is inclusive.