The motley crew assembled at a roadside tea stall in the blazing heat in Kondama Naiyuni Palayam village in Anantapur district, Andhra Pradesh, says theMahatma Gandhi National Rural Employment Guarantee Scheme has let them down.
In New Delhi, NC Saxena, former secretary of rural development, and member, National Advisory Council, feels NREGA is letting the entire country down. However, that common perception is just about the only thing they share about the largest ever employment guarantee programme in history.
The Anantapur villagers - a snapshot from February 2011 - were rueing the fact that the number of days of employment that one could avail under NREGA were limited to 100 - before that cap became policy in late 2010, many households here in this parched part of India used to notch up much more than 100 days, the minimum guaranteed under the scheme.
So now they have to look elsewhere to eke out a livelihood during the unforgiving summer months in this dry arid zone where the only crop is groundnut. It would have been great, if the scheme could give employment for at least half a year, went the sentiment.
Saxena's complaint is of an altogether different nature: he believes the scheme is inherently flawed, that it's a plain-vanilla employment generation scheme where the assets created are of questionable quality. "Such programmes should be deployed only to fend off starvation. For rural development, the government should focus on labour-intensive productive programmes," he says.
Welcome to the world of NREGA, India's flagship poverty alleviation scheme that has captured more public imagination than it can ever hope to handle. As it approaches its seventh year, that's also the biggest take home: it continues to polarise opinion. For some it's just not enough, for others it's a waste of time and resources.
The New, New Thing
Jairam Ramesh, minister for rural development, hopes a new set of guidelines and a reformed new shelf of works that are in place will satisfy the critics and give NREGA a new gilded edge. A new performance evaluation report of the programme - a compilation of independent research reports on various aspects of NREGA since 2007 - shows that the pros definitely outweigh the shortcomings.
"Just look at the very scale of the programme, can you expect anything but mixed perceptions?" he asks, leaning across the desk, in a building that the rural department shares with the agriculture ministry. The scale, then, was where the critics attained critical mass first.
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NREGA was originally meant for the poorest 200 districts of India, but was soon extended to the whole country after UPA returned to power in 2009. UPA's victory was ostensibly due to a rural surge in political support for the ruling dispensation thanks to the success of the scheme.
But none of the radical reforms needed mainly at the local governance level were in place when the scheme was forced to go pan-India. Suddenly, panchayats were awash with funds that they were untrained to handle, and tales of embezzlement started spinning out one by one. Not that panchayati raj institutions were untouched by scams until then, but the NREGA funds altered the proportions.
All of a sudden, scams involving panchayat secretaries and pradhans in back-of-beyond hamlets started making it to the front page of national dailies printed in English.
But none of the radical reforms needed mainly at the local governance level were in place when the scheme was forced to go pan-India. Suddenly, panchayats were awash with funds that they were untrained to handle, and tales of embezzlement started spinning out one by one. Not that panchayati raj institutions were untouched by scams until then, but the NREGA funds altered the proportions.
All of a sudden, scams involving panchayat secretaries and pradhans in back-of-beyond hamlets started making it to the front page of national dailies printed in English.
While there are no reliable figures to go by, conservative estimates has it that a pradhan candidate in gram panchayat polls spends Rs 10-15 lakh to get elected - against `2-5 lakh earlier - in the post-NREGA dispensation. they call it the bicycle-to Bolero syndrome, insinuating that NREGA has helped the pradhan trade bicycles for a Bolero jeep.
Panchayats 2.0?
Ramesh says all that will be taken care of in NREGA 2.0 which has a provision for certification of panchayat funds. This would be done through a district panel of chartered accountants, which is the first step in auditing.
A CAG audit of the entire programme will be in by November, and the report will be tabled in Parliament by December 2012. But assuming the pilferage is plugged to a certain extent, that still leaves a panchayat system untrained to handle the intricacies of demand-based employment with an added goal of asset creation.
This, the minister says, will be addressed through a unique transfer of funds. Starting this fiscal, the ministry of rural development will transfer 1% of its entire budget of Rs 99,000 crore to the ministry of panchayati raj to impart capacity building and training to panchayat functionaries.
Critics like Saxena wonder about the rationale of one ministry transferring its own funds to another ministry. "Why not increase the budgetary allocation for panchayati raj instead?" he asks, adding that such moves will only help create a patronage network. "Or better still, why not rename ministry of rural development as ministry of finance?" he asks.
Wages of Profligacy
The criticism regarding the populist politics of welfare would feel like a nudge when compared to the allegation that NREGA has distorted rural wages to the extent that farming has become unviable. Union agricultural minister Sharad Pawar even called for an NREGA holiday during the agricultural season.
But, at least on the face of it, that seems like an unfair criticism. The average number of days households were able to generate in fiscal 2011-12 was 42 - this was 47 in 2010-11 - which is too little to distort any labour market. Data from 2010-11 suggests that 70% of the works in the scheme have been generated during the agriculture lean season.
Ramesh says the single biggest impact of the scheme so far is in the upward revision of agricultural wages, even in areas where the actual wages are less than the minimum wages. What's implied there is one of the major ancillary effects of the programme so far: making the concept of minimum wages a reality in the poorest parts of the country.
A report by the Centre for Study of African Economies, Oxford University that looked at monthly data from 2000-2011 for 249 districts across 19 states concluded that since the poorest of the poor are agricultural wage labourers, rural public works like NREGA constitute a potentially important anti-poverty policy tool. The report, released in March 2012, says that on average, NREGA boosts the real daily agricultural wage rates by 5.3 per cent.
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But in parts of India where agriculture has been unviable for a variety of reasons, the NREGA wages have added to the misery. For instance, in Palamau inJharkhand, one of India's poorest districts, NREGA wages are higher than the actual wages for unskilled labour which are in the range of Rs 60-80 per day.
The ministry's own performance evaluation report citing independent studies conclude that the agriculture labour shortage is not caused entirely by NREGA. "Trends of reduced labour force in agriculture precede NREGA," it says pointing out that high non-farm wages is the major cause of labour shortage in the farm sector.
Economists like Pranab Kumar Bardhan, professor at the University of California, Berkeley, say that allegations that high NREGA-fuelled rural income has triggered inflation all around are heavily exaggerated. "NREGA gives jobs to very poor people and when they get more income, they cannot still afford high-value food items ... they may eat more rice or they may shift from low quality rice to high quality ... but that can't buy eggs, and most vegetables. The food prices that are going up are those of relatively high-quality foods," he had told ET on Sunday.
The ministry's own performance evaluation report citing independent studies conclude that the agriculture labour shortage is not caused entirely by NREGA. "Trends of reduced labour force in agriculture precede NREGA," it says pointing out that high non-farm wages is the major cause of labour shortage in the farm sector.
Economists like Pranab Kumar Bardhan, professor at the University of California, Berkeley, say that allegations that high NREGA-fuelled rural income has triggered inflation all around are heavily exaggerated. "NREGA gives jobs to very poor people and when they get more income, they cannot still afford high-value food items ... they may eat more rice or they may shift from low quality rice to high quality ... but that can't buy eggs, and most vegetables. The food prices that are going up are those of relatively high-quality foods," he had told ET on Sunday.
Where's the Party
But are the new changes that the ministry has brought in too little, too late? Critics like Saxena sure think so. But the proponents of the scheme believe the renewed focus on drought-proofing - 10 out of the 21 new works allowed under NREGA relate to watershed development - and livelihood creation will set off a chain of positive developments in India's hinterlands.
But the criticism here is that watershed works has to be a five-year-proposition, involving people's participation. "NREGA and watershed development plans are just not compatible," Saxena says.
In fact, seven years down the line, people's participation remains a hard nut to crack. NREGA is India's first rights-based poverty alleviation scheme, and by its very nature, it necessitates sustained campaigns to make potential beneficiaries aware of the provisions of the scheme.
This should have been the territory of political parties who could have mobilised the poor to take advantage of the scheme, gaining mass support in the process. Not the least in no-go areas under Maoist influence. But that hasn't happened, and whatever little mobilisation has happened has been thanks to efforts by civil society groups.
"There's a certain ambivalence among the political class. The whole bogey created in the name of agricultural wages is an example," says Ramesh. "BJP MPs say they want to scrap NREGA, but their chief ministers Shivraj Singh Chouhan and Raman Singh want it to continue," he chuckles.
An NREGA implementation programme in tandem with a massive awareness programme would have certainly helped the quality of assets built under NREGA. Villagers made aware of the reasons of their own backwardness would have realised that they themselves have a stake in the road they are making or the pond they are digging. But that's more of an exception, true only in regions with high civil society activity.
Yet, there are states where the durability issue is being creatively addressed. For instance, in Maharashtra and Madhya Pradesh, NREGA is used to build kuchcha roads which are then black-topped using funds from the Chief Minister's Gram Sadak Yojana.
Dwindling Crowd
In fact, the reluctance of the political class - including Congress and its UPA allies - to own NREGA is accentuating the single-biggest factor marring the popularity of the scheme: delayed payments of wages. Around 50 lakh households who availed NREGA work in 2010-11 turned their back on the scheme in 2011-12, mainly because they had lost faith in the scheme thanks to wage delays exceeding a year.
The NSSO survey on NREGA findings in 2009-10 indicate that in Andhra Pradesh, only about 68% of households received payments within 15 days; in Rajasthan, 10% of the households received payment within 15 days; and in Madhya Pradesh 23% of the households received payments within 15 days.
What this would mean is a reversal of one of the biggest gains so far: mitigation of distress migration out of parts of Bihar, UP, AP and Odisha. The poorest of the poor who undertake such seasonal distress trips in search of livelihood - to the fields of Punjab from Bihar and UP; to the brick kilns of Andhra from Koraput-Bolangir-Kalahandi belt in Odisha - are losing interest in NREGA because there is no guarantee that work would be opened in time, and even if they are, that payment would be made on time.
What's on the Job Card
The government is hopeful that technology and dovetailing of NREGA with the Aadhar project will address the wage delay issue to a good extent. One stopgap measure on the ministry's part so far has been to reinvent the wheel: suspending wage payments through banks and post offices, and going for cash on an ad hoc basis.
The ministry feels that all such warts would pale as NREGA emerges as an entry point for a decent future for the less fortunate. Already, 15 days of employment under NREGA will make one eligible for insurance under the Rashtriya Swasthya Bima Yojana.
In NREGA 2.0, one member per each household that has done 100 days under NREGA will be selected for a basic 3-month training in skills like carpentry and plumbing under the National Rural Livelihood Mission, thus making NREGA work as a portal to organised labour.
The aim's lofty enough: From a backstopping social security net to an entry point to a bright, possibly, urban future. And if that happens, for a rural poverty alleviation scheme that has become the staple of urban cocktail conversation, NREGA would have come a long way.
5 Ways NREGA 2.0 will Address Legacy Challenges
Skill Training: The logical next step, from manual to skilled. One person from each household that completes 100 days of work will be trained under NRLM on a range of skills like carpentry.
CAG Audit: An annual CAG audit - limited to the utilisation of NREGA funds - will help bring in more transparency. This year's report will be in by November, to be submitted to Parliament by December.
END to Minimum Wage Row: The AP High Court ruling that NREGA payments below state minimum wages amounted to forced labour had put GoI in a quandary. The ministry will now amend the NREGA Act to put an end to the controversy. Safeguards to ensure that states don't arbitrarily jack up minimum wages will be put in place.
MoRD funds for MoPR: The rural development ministry will transfer 1% of its entire budget of Rs 99,000 crore to the panchayati raj ministry for capacity building and training of panchayats. This, it hopes, will bring in a sea change in NREGA implementation at the ground level.
Rural Sanitation: NREGA funds will be deployed to promote rural hygiene. For every toilet built (estimated cost of Rs 10,000) Rs 4,500 will go out from the NREGA kitty. The mandatory 60:40 labour-to-material ratio will be maintained at the gram panchayat level.
Five Critiques that Often Come the NREGA Way......And a reality check
1) NREGA's making farming unviable
IN A WAY, YES. But that's only in areas where the actual agri wages are lower than what the state guarantees as minimum. Available research indicates that trends of reduced labour force in agriculture precede MGNREGA. The real culprit could be elsewhere: high non-farm wages. According to the National Sample Survey Organisation, the decline in agriculture labour as a share of total economic activity trend is since 2004, two years before MGNREGA.
2) Stay home, draw unemployment allowance
Nothing's further from the truth. NSS data notes that around 19% of the rural households sought but did not get employment from June 2009 to July 2010. Now if an applicant is not provided employment within 15 days of receipt of his application or from the date on which the employment has been sought, he/she is entitled to a daily unemployment allowance. This is a provision that's honoured mostly in its breach because the onus to provide the allowance is on the state.
3) Assets built under NREGA are not durable
Partly, yes. As late as 2011, the World Bank noted that he objective of asset creation runs a very distant second to the primary objective of employment. The main culprit here is the lack of planning. Yet, there are states that have worked around this. For instance, MP and Maharashtra encourages building kuchcha roads under NREGA. This is then black-topped using funds from the Chief Minister's Gram Sadak Yojana.
4) It was supposed to make panchayats work, but NREGA has only decentralised corruption
Yes & no. NREGA has transferred unprecedented resources to panchayats but lack of training and zero investment in capacity building has muddled the scene.Vigilance and monitoring committees haven't taken off. But NREGA 2.0 envisages certification of the accounts of gram panchayats through a district panel of chartered accountants. So there will be a psychological pressure to bring in more accountability and transparency.
5) After 7 years, NREGA has run its course ...
No. While fingers point to scams and low-quality assets, few look at the ancillary effects. For one, the concept of minimum wages is a tangible reality in Indian villages, thanks to NREGA. Also, the programme has encrusted the idea of wage parity: In 2011-12, around Rs 12,000 crore was spent on wages for women and around 50% of the total persondays generated have been by women. Caste equations have been altered irrevocably, distress migration has come down
