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Tuesday, 20 December 2011 00:00
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Limited participation of the poor and wages too low?


Apart from the fact that just 4 million jobs were created by the UPA’s flagship Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) in the first nine months of this year (assuming a “job” implies working 250 days a year), the programme seems to be running into all manner of problems. Agriculture minister Sharad Pawar has said this is responsible for raising agriculture wages as there is a huge labour shortage during the peak farming season—given the low number of jobs being created by MGNREGA, however, we have said before, this looks unlikely (http://bit.ly/sJOZhZ). What could complicate things, however, is a Karnataka High Court ruling that mandates the government fix MGNREGA wage rates at the minimum wage of each state—while some in the central government are in favour of appealing this in the Supreme Court, rural development minister Jairam Ramesh and UPA chief Sonia Gandhi’s National Advisory Council (NAC) are in favour of linking MGNREGA wages to the minimum wage. If so, it will mean arrears of R4,000-odd crore will have to be paid out and, more importantly, this will mean MGNREGA costs will be determined by state governments—Chhattisgarh, for instance, raised its minimum wage to R75 on June 1, 2009, to R83.75 on October 1, 2009, and to R145 with effect from April 1, 2010. At higher wages, MGNREGA’s attractiveness will increase a lot more and if, by then, the government actually starts giving jobs for 100 days a year, when they are demanded, it will actually start driving wages up, as Mr Pawar fears.

Even more embarrassing, data collected by the MGNREGA authorities seems to suggest that less than a tenth of those working in the scheme are poor. Until December 7, a total of 12 crore households were registered for jobs, but just 1 crore of them were BPL—a total of 2.2 crore of these households had worked for more than 15 days in the programme and, of these, just 0.2 crore were BPL. The rural development ministry passes this off as poor data collection—it says “the MIS reflects the status (of a family) as ‘NO’ (not BPL) by default” and has asked project authorities to update the BPL data. But given that the number of BPL card holders is often nearly as high as the number of persons in many states, MGNREGA’s lower numbers are difficult to understand. NSS data, for 2009-10, economist Surjit Bhalla has found, suggests the proportion of poor in MGNREGA programmes is 30%. Hopefully this will seal the debate on the proportion of India’s poor.



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