India’s iron rice bowl PDF Print E-mail
Thursday, 03 February 2011 00:00
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On its fifth anniversary, is India’s rural jobs guarantee scheme anywhere near China’s famous iron rice bowl? The scheme, to be fair to it, was never meant to be so ambitious, and at best, its ambition was to provide jobs for just 100 days a year, and at a wage which is lower than the minimum wage—indeed, the big tussle between the government and the proponents of the scheme like Aruna Roy and Jean Drèze is that the MGNREGA wage levels be hiked to equal minimum wages across the country. With Rs 1.1 lakh crore already spent on the scheme in the last 5 years, how effective has it been? Certainly it has been one of the most successfully-run schemes, with just 180 complaints of corruption received in the last 3 years—both Drèze and Roy are complaining about how the scheme is not being expanded fast enough, how the wages are low; the complaints of fake muster rolls are minimal. This is because the scheme’s design allows you to see, on the Internet thanks to NIC and TCS, the work done in each district, the payments made, the wages and so on—you can, if you like, take this data and then go to each district to see if the well has been dug, the wages paid to each person and so on.


Critics point to how MGNREGA has raised wage rates, caused a huge shortage of labour—tractor manufacturers are on the record talking of how their sales have improved post-MGNREGA. Some think-tanks even give out data to show food inflation is much higher in MGNREGA districts. With 5.3 crore households employed under MGNREGA in 2009-10 and getting 54 days of employment in a year, that’s 286 crore man-days of employment or 2.86 crore man-years of employment, assuming a person has to be employed for 100 days a year to qualify as employed under the Usual Status method. That’s around 6.5% of India’s work force—large enough to help rural distress and likely to have caused the kind of impact the scheme’s critics have been alleging it has had on overall employment. To the extent it has driven up wages, the solution lies in raising farm productivity. Without this, both India’s agriculture and overall growth story are certain to be compromised.


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