‘Keep UID out of MGNREGA’


A statement that has been endorsed by 100 individuals/groups from across the world.

The undersigned demand that the plan to link the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) to Aadhaar (or UID) be revoked immediately. This is an extremely dangerous move that threatens to cause havoc in MGNREGA’s fragile structure.

The Ministry of Rural Development has put out a tender (dated October 11, 2010) worth Rs.2,162 crore to engage “service providers” for MGNREGA under a “public private partnership” model. The contract includes “UIDAI compliant enrolment of job card holders under MGNREGA scheme,” “Recording … data in the field such as biometric attendance at worksite with GPS coordinates … and updation of centralised MIS,” and similar measures.

Clearly, the Ministry intends to link the issue of new job cards to UID enrolment in the States. Job cards issued in 2006 are due to expire in 2011. Job cards are required to claim employment under the MGNREGA. If the issue of new job cards is linked to UID enrolment, there is a danger of creating a jam that would disrupt the programme. The process of job cards renewal, in any case a slow process, will be further slowed down. Many people are likely to be denied their entitlement to 100 days of work as they will be without a job card. Further, in spite of the hiring of “service providers”, the entire administrative machinery is likely to be diverted into capturing of biometrics or supervising “service providers”. The scale of MGNREGA works is bound to suffer. This would be a gross injustice to NREGA workers, who are already deprived of their basic entitlements.

The proposal of “biometric attendance at the worksite with GPS coordinates” is completely impractical — many MGNREGA worksites are in remote areas with poor or no connectivity. Does that mean those worksites will close down?

We do welcome the use of technology provided that it enhances transparency, empowers labourers and is cost effective. Such technology has been used with success in Tamil Nadu. For instance, it combines SMS reports on daily attendance with random spot checks to curb the problem of fake muster roll entries. Localised use of biometrics, independent of UID, to speed up payments can be considered. Biometrics and UID are not the same. In Rajasthan, simpler measures have been put in place, such as “transparency walls” where all job card holders in the Gram Panchayat are listed along with days of work, allowing people to monitor implementation.

There are many problems in the implementation of the MGNREGA which need the urgent attention of the Ministry. These include the non-payment of minimum wages, delays in wage payments, insufficient scale of MGNREGA works, discrimination against Dalits and women, and so on.

We therefore demand that neither MGNREGA employment nor wage payments be linked to UID enrolment. Employment of 100 days under MGNREGA is the only universal entitlement that the rural poor enjoy. It should not be jeopardised by the introduction of disruptive technology under pressure from corporate and security lobbies.

Signatories: Nikhil Dey, Aruna Roy and Shankar Singh (Mazdoor Kisan Shakti Sangathan); Jayati Ghosh (Professor, CESP/SSS, Jawaharlal Nehru University); Jean Drèze (Honorary Professor, University of Allahabad); Kamal Mitra Chenoy (Professor, Jawaharlal Nehru University); Reetika Khera (Visitor, Centre for Development Economics); R. Ramakumar (Associate Professor, Tata Institute for Social Sciences); Mallika Sarabhai (CRANTI, Citizens Resource and Action Network Initiative) and others.

Farmers’ suicides: Can seek remedial measure, says SC


The Supreme Court on Monday said it was not in its power to stop debt-ridden farmers from committing suicide but that it was willing to issue some general instructions to ensure better conditions for them. “We cannot stop suicides, but we can issue general instructions for remedial measures to prevent farmers from committing suicides in large numbers,” a Bench led by Chief Justice of India K G Balakrishnan observed. The Court was hearing a 2006 PIL filed by advocate Sanjeev Bhatnagar questioning the country’s agricultural policy in view of a spate of farmer suicides.

Bhatnagar, who is also an agricultural economist, quoting government reports on Monday said that 87,567 farmers had killed themselves between 2002-08.

The Bench said the government has to work on some “special package” like the one presented by Prime Minister Manmohan Singh in 2006. It said, “We have to find out the reasons which are driving the farmers to suicide. The problem is confined to some states.” The government counsel has assured the court of putting the Bench’s views before the Agriculture Secretary.


The system strikes back

Vidya Subrahmaniam IN THE HINDU DECEMBER 17, 2009

Missing job cards, fudged muster rolls and diversion of NREGS funds through fake bills. What the Rajasthan social audit has revealed is the tip of the iceberg.

Bhilwara-2009 invited a swift and strong backlash — the government backed off realising it had stepped into a quagmire of corruption

The battle being fought in the panchayats, streets, offices, and courts of Rajasthan is not just about social audit

To understand why civil society participation in the social audit of the National Rural Employment Guarantee Scheme (NREGS) in Rajasthan raised the hackles of a swath of people, among them gram panchayat staff, politicians and bureaucrats, it is necessary to rewind to the October 2009 Bhilwara social audit which was conducted jointly by civil society and the Rajasthan government.

The induction of civil society members into the official NREGS social audit brought experience to the audit teams but, more importantly, it made the oversight process transparent and accountable.

The effect of this was dramatically visible post-Bhilwara. When the audit teams compiled the results of the 10-day-long exercise, they were stunned by the extent of corruption that came to the fore, especially in the purchase of material for civil works under NREGS. Bhilwara had been audited before along with other Rajasthan districts. But these were paper exercises that revealed few lapses, and did not in anyway threaten the tranquil world of the sarpanchs, engineers and Block Development Officers. Bhilwara-2009, on the other hand, invited a swift and strong backlash, and the government backed off realising it had stepped into a quagmire of stealth and corruption.

The Bhilwara audit teams, which examined bills and vouchers relating to material purchases in 11 of Rajasthan’s over 9,000 gram panchayats, conservatively estimated diversion of NREGS funds in the inspected village panchayats at Rs. 1.5 crore (about Rs. 12 lakh per gram panchayat). The sample size may have been too small to allow extrapolation for the more than 9,000 gram panchayats, but it nonetheless gave a fair picture of the overall volume of potential corruption under NREGS — anything between Rs. 800 crore and Rs. 1,000 crore a year. The allocation of NREGS funds for Rajasthan for the year 2009-2010 was Rs. 9,525 crore, up from Rs. 6,175 crore the previous year. This was to be split in the ratio 60-40 between labour wages and material costs.

The plain meaning of this was that roughly a third of the funds allocated for material purchases was being used to line the pockets of a long chain of people — from the sarpanchs, gram sevaks and sachivs (secretaries) at the lowest rung through civil engineers, accountants, contractors, dealers and suppliers to BDOs, going right up to the District Collector in a few cases.

Naturally, a fuller audit held out the threat of bringing down this cosy nexus. The Bhilwara exercise unearthed two sets of irregularities. The padayatris reported back fudged muster rolls, missing job cards, delayed and partial payment of wages as well as the use of machines to displace labour. The auditors in the 11 gram panchayats found a recurring pattern of fake and hand-written bills, exaggerated claims, use of substandard material, and payment by cash or bearer cheque.

The fund diversion was intriguing in the context of a series of Government Orders issued to panchayats and District Collectors advising strict compliance of norms for the purchase of material for projects under Rural Development and NREGS — among them sourcing of supplies only through registered firms, inviting open tender for purchases, ensuring that the dealer possessed a tax compliance certificate from the commercial tax department, and ensuring further that only bills bearing sales tax registration details were accepted for payment.

A GO dated February 16, 2007 reiterated the norms and regretted the heavy loss to the exchequer due to the flouting of norms by the gram panchayats and panchayat samitis. A second GO, dated June 18, 2007, brought the discomfiting results of previous social audits (done again by Aruna Roy and her team) to the attention of District Collectors, noting that these had revealed continued submission of kaccha (unofficial) bills by gram panchayats. The GO instructed the Collectors to keep a strict watch on the quantity and quality of material supplies going into NREGS works. It also asked them to ensure that payments were made only to registered, bonafide firms.

GOs unheeded

A whole two years later, the Bhilwara social audit would discover that the GOs went unheeded. In the event, Bhilwara-2009 threw up a curious situation. The coming into record of phony bills brought the commercial tax authorities into the picture. Queries went out to suppliers who had received payment for material sold to the gram panchayats. One the one hand, the fake bill trail led to sarpanchs, engineers, BDOs and politicians. On the other, firms were asked to produce Value Added Tax-paid bills, which opened a can of worms. VAT evasion being easy to detect, the entire supply chain stood to be exposed, setting off panic among sarpanchs, politicians, bureaucrats and manufacturers, who collectively decided to challenge the government on its move to extend the Bhilwara model of civil society-government social audit to the whole of Rajasthan.

With protests mounting, the State government altered the norms it had itself held sacred in letter after letter. It instructed District Collectors to sanction payments even on kaccha bills provided the material supplied was fully utilised and was of assured quality. More startlingly, the GO dated November 10, 2009 announced VAT deduction at source for sanctioned payments. This was an incredible case of a government accepting the legal validity of kaccha bills.

The government had no justification for letting the offenders off the hook given the extent of fraud uncovered in Bhilwara. Moreover, feedback from the now abandoned November-December, 2009 audit programmes, and an inspection done by the government itself would strongly corroborate the Bhilwara findings.

The Rajasthan government undertook to carry out an inspection of NREGS works in the Soniana gram panchyat in Chittorgarh district essentially to appease the social activists who were upset by the suspension of the November-December audits. Filed as recently as December 6, 2009, the inspection report established pervasive irregularities in inviting tenders as well as the absence of technical sanction for most civil works. But this was nothing compared to the fact that over the years the gram panchayat had gradually edged out the labour component from NREGS, seriously undermining the very premise of the job guarantee programme.

The Soniana panchayat’s fund utilisation for 2009-2010 showed that a mere 10 per cent of the allocated Rs. 3.81 crore had gone towards labour wages as against the mandated 60 per cent. The funds drawn by the panchayat increased every year, from Rs. 22.70 lakh in 2007-2008 to Rs. 3.81 crore in 2009-2010. And progressively the proportion spent on labour wages decreased, from 67 per cent in 2007-2008 to a shocking 10 per cent in the current year. This led to one of two obvious conclusions: Either poor people needing employment were being defrauded or money was flowing to a panchayat that did not seem to need employment.

The government also had feedback from a few gram panchayats where the audit work had made some progress despite the protest. In the Sapotra gram panchayat in Karauli district, auditors established work measurement irregularities amounting to a total of Rs. 17.52 lakh.

These revelations coupled with the Bhilwara findings made a persuasive case for civil society participation in NREGS social audit. However, instead of standing firm, the government bought into the argument of the protestors that Aruna Roy and others were busybodies who had appropriated the rights and duties of the gram sabha. In support of their claim, the protestors cited a set of amendments introduced to NREGA in December 2008. Clause 13(B) (iii) of the amendments states that social audit will be done by the gram sabha which will elect from itself a Social Audit Committee of workers experienced in NREGA work. On the basis of this they also obtained two court stays against the inclusion of social activists in social audit.

And yet the same amendments also establish the public’s rights in NREGS social audit in the following respects: to inspect all relevant documents, including complete files; to submit any information; and to attend, observe and participate in the audit without intervening in its proceedings. Ms Roy is at pains to point that the activists at no point took the audit into their own hands, but that they were officially inducted by the government and went into the panchayats as part of a government team.

Basic principle

There is also the basic principle of audit which is that it must be done by a people external to the works being audited. To invest this right exclusively in the gram sabhas is to make them at once jury, judge and executioner. Forget the NGOs, the Rajasthan government said as much in a note it addressed to District Collectors. Dated April 2, 2009, the note points out that in a large number of cases social audit forums are constituted, not by the gram sabha but by the sarpanch, who packs it with his/her spouse and other relatives. The note goes on to say, “it is a fact that wherever NGOs have conducted audit in open hearings, a large number of irregularities were found. As compared to that, the irregularities detected in social audit by forums are negligible and put a question mark on their credibility.”

The government had enough and more evidence to make a strong case before the courts for civil society participation in social audit. Instead it suspended the audits — without being asked to do so.

It is now widely accepted that in many parts of the country, NREGS has emerged as a lifeline for the rural poor. It has had a cascading effect, raising wage levels even in the private sector. The biggest threat to the job guarantee programme was always control of the funds by a corrupt elite. Statutory social audit was a radical and innovative feature of the Act; it introduced the concept of vigilance to opaque and non-accountable systems.

The battle being fought in the panchayats, streets, offices, and courts of Rajasthan is therefore not just about social audit. It is about who will have control over the funds and priorities of the world’s largest guaranteed programme to fight poverty and generate employment — one that has the power to change the complexion of rural India.


Expand and re-orient NREGA


The recession is a promising moment to expand NREGA with greater emphasis on building social capital in a big way.

Soon after assuming office, the first UPA government took an impressive step for the alleviation of rural poverty by launching the National Rural Employment Guarantee Scheme. It was, indeed, a wise move to insulate the programme from the vicissitudes of electoral politics by enacting the National Rural Employment Guarantee Act (NREGA). The implementation of the programme has been uneven. A large number of articles have appeared in the press pointing out the defects in impl ementation. On September 19, The Hindu published an article by Professor Jean Drèze, “Employment guarantee or slave labour?” It reveals a sorry state of affairs. Every effort should be made to remove the shortcomings and ensure better implementation. Despite all its failings, the NREGA has proved to be a boon to the rural poor. It is now necessary to expand and re-orient the NREGA. That is the theme of this article.

The NREGA evolved into its present shape by building on past experience in designing and executing schemes for providing employment. The new programme is an improvement on its predecessors. There is greater flexibility and the implementing agencies have freedom to start new works according to necessity. Though the main emphasis is on providing employment, the law also aims at the creation of durable productive assets. The present recession is a promising moment to expand the programme with greater emphasis on the second objective of building social capital in a big way.

Great scope for building social capital on a massive scale. More than half a century ago, Ragnar Nurkse, the distinguished Cambridge economist, had pointed out that capital starved over-populated countries could build social capital in a big way by employing the surplus labour on a variety of projects. He had listed schemes concerning irrigation, drainage, roads, railways, housing, etc. In his view, the only danger was the onset of inflation caused by the increased demand for food and other wage goods. Though the Indian planners were aware of Nurkse’s prescription, they could not have implemented the idea in the pre-Green Revolution era of precarious food supply. Now we have ample stocks of food grains. And our industry will welcome the enhanced demand for consumer goods. We can, therefore, employ the surplus labour for building social capital in a big way without incurring any risk.

National Rural Development Board. There is considerable scope for absorbing vast quantities of human labour in well planned projects of soil and water conservation, rain water harvesting, irrigation and drainage works, flood control, watershed development, de-silting and maintenance of numerous water bodies, both manmade and natural, and an ambitious programme of afforestation aimed at restoring green cover throughout the country. In that enormous programme, governments’ efforts should be supplemented by suitable NGOs, co-operative societies, joint stock companies and so on. The present ad hoc approach aimed at providing immediate employment should yield place to a systematic, well planned, well co-ordinated effort.

Such an ambitious programme would necessitate the setting up of a National Rural Development Board clothed with adequate statutory powers. It should be a lean organisation responsible for policy and overall guidance. Under the Board there should be a well staffed regional office for each major river basin to handle planning, formulation of projects, co-ordination between major watersheds, technical guidance and supervision, maintenance of the assets created and so on. The valley of a big river will naturally include a number of major watersheds. Every major watershed should have a small office for coordinating and supervising the work within that watershed. The Panchayati Raj set up should handle the work within the district. The expanded programme will generate employment on a large scale, both for skilled and unskilled hands. The afforestation project will absorb a large number of rural workers, many on a permanent basis.

Two basic suggestions for better implementation: The fatal weakness of NREGA is poor implementation. The main reasons for shoddy execution are the decline and degeneration of the administration at all levels, particularly at the block level, and the lukewarm, half-hearted approach to democratic decentralisation. As I am out of touch with field conditions, I am unable to present a comprehensive proposal for setting things right. However, as a Collector in North Bihar five decades ago I had closely observed the robust functioning of the block administration. In 1981-82, I had occasion to see the sorry state of the block set up in several States that I visited as Director of the National Academy. As far as the Panchayati Raj is concerned, I had the privilege of serving on the review committees set up by two States, Karnataka and Kerala. Relying on these slight exposures I have mustered the courage to make the following radical suggestions.

Induct Block Development Officers of a higher calibre. The responsibility of the BDO is so onerous that it should be held by an officer of a much higher calibre. I suggest that after the completion of their training, all IAS officers should serve as BDOs for at least three years. The implementation of this suggestion will provide only about 300 officers. The country would need some 6000 bright young men and women to work as BDOs.

I put forward three suggestions for getting the required number of officers. The annual recruitment to the All India and Central Services may be stepped up by 50 per cent. After six months’ training, the new recruits should serve as BDOs for two years. Thereafter the required number may be allotted to the different services on the basis of their performance, aptitude and choice. The rest may continue as BDOs. A two-year stint as BDO will prove to be an invaluable experience even for those joining the foreign service.

The second suggestion is that short term contracts may be offered to the products of IITs, Regional Engineering Colleges, national law schools and so on. They could be posted as BDOs after being trained for six months. At the end of the contract some may be absorbed in government service and the others may move on to jobs of their choice elsewhere. Companies in the public and private sectors may be persuaded to offer them suitable employment giving credit for their service in the Block.

A third possibility is to depute young officers from the State services and public sector banks to work as BDOs for fixed periods after a short orientation course. The matter, of course, calls for a more thorough consideration.

The District Officer to be the Chief Executive of the District Panchayat. Thoroughgoing democratic decentralisation is the only way in which this sprawling country of great diversity can be governed efficiently. The Seventy Third Amendment to the Constitution providing for the creation of panchayats at the district, intermediate and village levels was a giant step forward. The State governments have, however, been reluctant to empower the panchayats. Their approach has been half-hearted and lukewarm. Even so, in the larger public interest, the States should be persuaded to delegate adequate powers to the panchayats.

After considerable introspection, I have come to the conclusion that the District Officer, variously designated as Collector, Collector and District Magistrate, or Deputy Commissioner, should be the Chief Executive of the district panchayat. This single step will go a long way in strengthening the Panchayati Raj. The District Officer should, of course, have under him at least four senior officers to handle work relating to law and order, land revenue, development and Panchayati Raj. Initially there will be many hitches and irritants. A sub-clause should be added in Article 243-C of the Constitution spelling out the powers of the Chairperson and the Chief Executive.

Such a clear demarcation of powers and responsibilities will hopefully reduce friction and promote mutual respect, understanding and cooperation between the two functionaries. Furthermore, hand-picked officers of 10-12 years of service should be appointed District Officers and the Chairmen should be seasoned public persons. I hope that in due course, the relationship between the Chairperson and the Chief Executive will settle down to resemble that between the Chief Minister and the Chief Secretary. In the initial stages, however, the relationship could be like that between the non- executive chairman and the managing director of a large company. I know that this proposal is highly controversial. It will be opposed both by politicians and bureaucrats. However, in my considered view, this radical step will facilitate the better implementation of the re-oriented NREGA.

The massive effort in building social capital outlined in this essay could trigger higher productivity of land and labour, diversification of agriculture and faster industrial growth. It would also mitigate the suffering inflicted by chronic drought and flash floods.

What I have presented is not an action plan or a project report for reorienting NREGA. It is only the rough outline of a fond vision I have been nursing for a long time. I shall be happy if this article provokes purposeful discussion.

(P.S. Appu is a former Chief Secretary of Bihar and former Director of the Lal Bahadur Shastri National Academy of Administration, Mussoorie. He can be reached at: psappu@hotmail.com)

Employment guarantee or slave labour?

Jean Drèze IN THE HINDU SEPTEMBER 19, 2009

The delays in NREGA wage payments are not just operational hurdles — they reflect a deliberate attack on the scheme.

Reports of prolonged delays in NREGA wage payments have been pouring in from all over the country in recent months. The reports are truly alarming, with delays of several months becoming the norm in entire districts and even States. Worse, there are worksites where labourers have lost hope of being paid at all (we found some in Khunti district, Jharkhand). This is not very different from slave labour.

Under the National Rural Employment Guarantee Act, workers must be paid within 15 days. Failing that, they are entitled to compensation under the Payment of Wages Act — up to Rs. 3,000 per aggrieved worker. However, except in one isolated instance in Jharkhand, compensation has never been paid.

Even small delays often cause enormous hardship to workers who live on the margins of subsistence. How are they supposed to feed their families as they wait day after day for their wages, clueless on how long it will take and powerless to do anything about it? A recent investigation of hunger deaths in Baran district, Rajasthan, found that delays in NREGA wage payments were partly responsible for the tragedy. Timely payment is, literally, a matter of life and death — all the more so in a drought year.

It is often argued, especially by government officials, that the main reason for the delays is the inability of banks and post offices to handle mass payments of NREGA wages. There is a grain of truth in this, but as a diagnosis of the problem, it is quite misleading. First, the current “jam” in the banking system is the Central government’s own doing. It reflects the hasty and top-down switch to bank payments imposed about a year ago. As far back as October 2007, members of the Central Employment Guarantee Council warned against this and advocated a gradual transition starting with villages that are relatively close to the nearest bank.

Secondly, the delays in banks and post offices are by no means immutable. In fact, the main obstacle (opening millions of accounts in a short time) is already behind us. In a few States like Rajasthan, the volume of NREGA payments is certainly a continuing challenge. But in most States, these would be quite manageable with suitable arrangements on the part of banks and post offices. In Khunti, we found that payments were easy to expedite with a little help from trained volunteers who accompanied workers to the banks. In Andhra Pradesh, there is a clear protocol for payments through post offices, with strict timelines and constant monitoring. According to this monitoring system, I am told, 70 per cent of the wages are paid within 15 days.

Thirdly, the delays are not confined to the banking system. Very often, it takes more than 15 days for “payment orders” to be issued to the banks by the implementing agencies (for example, the gram panchayat). Thus there are lapses outside the banking system too. For the local administration, blaming the banks is a convenient way of passing the buck.

On closer examination, various hurdles appear to contribute to the delays. These include delays in work measurement (themselves linked to the tyrannical behaviour of the engineering staff), bottlenecks in the flow of funds (sometimes bringing NREGA to a halt in entire blocks), irresponsible record-keeping (such as non-maintenance of muster rolls and job cards), and, yes, hurdles related to bank payments. But I venture to suggest that behind these specific hurdles is a deeper “backlash” against NREGA in many areas. With bank payments making it much harder to embezzle NREGA funds, the whole programme is now seen as a headache by many government functionaries: the workload remains but the “inducements” do not. Aside from the possibility of foot-dragging, slowing down wage payments is a convenient way of sabotaging NREGA, because it makes workers themselves turn against the programme. That was certainly the situation we found a few months ago in Khunti, where workers had started deserting NREGA worksites. This backlash, I surmise, is the real reason why massive delays have emerged around the same time as the transition to bank payments. Seen in this light, the delays are not just operational hurdles — they reflect a deliberate attack on NREGA.

The Central and State governments, for their part, seem to be in denial mode. In Delhi, the Ministry of Rural Development has a vague awareness of the delays, but little to show by way of factual evidence or remedial action. When the Ministry’s attention was drawn to the morass of wage payments in Khunti district, the Deputy Commissioner was asked to take action and certify that no wages were pending. She sent the certificate (in writing) within a few days. It turned out to be based on nothing more than empty assurances from the Block Development Officers, who have no credible data on wage dues. A recent social audit in Khunti showed that rampant delays persist to this day. Ostriches are alive and well in Jharkhand.

Instead of addressing this emergency, the Ministry is lost in a maze of confused proposals about “NREGA-2.” The real meaning of this term became clear on August 20, 2009, when the Ministry was expected to unfurl the NREGA-2 blueprint on the occasion of Rajiv Gandhi birth anniversary. This blueprint boiled down to an architectural sketch (hastily prepared by the School of Planning and Architecture) for “Rajiv Gandhi Seva Kendras,” to be built in all gram panchayats as one of the “core activities” under NREGA. This is a strange idea, especially in a drought year — pucca buildings are not even on the list of permissible works. Perhaps someone thought that putting the Gandhi tag on NREGA across the country would please the political bosses and help the ruling party reclaim the programme. The recent rearrangement of the Central Employment Guarantee Council, with some very able members being shown the door to make room for Congress MPs and friends, was in the same genre. A better way of winning credit for NREGA would be to make it work, starting with timely wage payments.

Insofar as the Centre has any answer to the problem, it seems to be based on the “business correspondent” model, whereby bank agents will go around villages to make cash payments recorded through hand-held electronic gadgets. This solution, however, is based on a wrong diagnosis — that the main problem is the distance that separates many villages from the nearest bank. Distance is certainly an issue in some areas but it has little to do with the delays. In any case, the need of the hour in a drought situation are not futuristic experiments but is immediate acceleration of payments.

Ending the delays is not a simple matter. The first point to note is that, as things stand, there is no in-built alert in the event of delays, let alone any in-built pressure to act. Programme Officers at the block level typically have no data on delays in wage payments. The workers, for their part, have no way of airing their grievances. This is one aspect of the general lack of grievance redress provisions in NREGA; or rather, of the sidelining of these provisions on the part of Central and State governments — in this case by ignoring the compensation clause. Activating this clause (along with Section 25 of NREGA, which provides for penalties on anyone who does not do his or her duty under the law) would be of great help in accelerating wage payments.

Aside from this, other effective measures can be taken. Piece rate work could be replaced with daily wage work in drought-affected areas, to dispense with the cumbersome process of work measurement. In any case, wages could be paid on the basis of attendance wherever work measurement is not completed within, say, seven days. Buffer funds can be provided to gram panchayats and post offices, to avoid bottlenecks in the flow of funds. Clear timelines are required at every step of the payment process, along with close coordination of the NREGA machinery with banks and post offices. Job card entries need to be made at the worksite, so that workers have proof that wages are due. Partial advances, in cash at the worksite, could also be considered. And, of course, wage payments need to be meticulously tracked.

These are just a few examples of possible steps to reduce delays in wage payments. The first step, however, is to recognise the problem and give it overwhelming priority. The absence of that is the big stumbling block today.

(The author is Visiting Professor at Allahabad University and member of the Central Employment Guarantee Council.)



Employment guarantee or slave labour?

By Jean Drèze
The delays in NREGA wage payments are not just operational hurdles — they reflect a deliberate attack on the scheme.

NREGA: Breaking new ground




The NREGA, the flagship programme of the UPA government, was revolutionary in its promise of inclusive growth, the right to work and the dignity of labour and a rational, participatory relationship with the State. And it has mostly delivered…

Suddenly the NREGA has become a buzz word. It stands vindicated by the mandate of the people in its most basic evaluation in a democracy — the general elections. Basking in the glory and security of post-electoral analysis, it is actually the b est time for those who support the basic philosophy of the NREGA to focus on what it has done and what it has not, by its own parameters.

The first and the primary focus should be to examine its impact on the human resource base of rural India. Has it energised, mobilised, empowered, and delivered to India’s poorest and most marginalised rural people? Secondly, has it provided those who were “not shining” a measure of dignity, tangible economic benefit, and a motivation to participate in local action? This is the crux, for, something as vast and ambitious as the NREGA can only succeed in bringing about change if millions of workers become its true advocates and monitors.

Let us begin with the most persistent charges of endemic corruption. Notwithstanding negative propaganda and the prominent reportage of corruption, NREGA stands apart from employment and poverty alleviation programmes in significant ways. It is the first national programme of consequence which has woven transparency and accountability into the mundane fabric of daily interaction of people with government. The cases of reported corruption have shocked the intelligentsia. The rural worker might often be the victim but will still offer critical support, not only because it has provided wage income, but also for facilitating disclosure, which helps identify and fight pilferage. In fact, in many cases, scams have been exposed by the workers themselves. NREGA gives an opportunity to break the feudally enforced silence of its victims. Through transparency and social audit measures, it allows anyone, anywhere to be part of the monitoring of the delivery system. The other programmes appear to be clean only because no one knows what goes on! The NREGA gives a further opportunity to realise the Constitutional sovereignty, the power of the people. What the political establishment would do well to understand is that the vote was not a blind endorsement, but the expression of a fragile hope of a rational participatory relationship with the government.

NAREGA1New claims

The NREGA has opened up a unique legal space for the poor, with a consequent, legally-mandated obligation on the administration to deliver. In fact, implementation rests on the simple philosophy that ordinary people will go to great lengths to procure their entitlements, given the space to do so. Apart from systemic corruption, we are all aware of the chronic inefficiency, unwillingness and incapacities of the bureaucratic system to deliver entitlements for the poor. The persistent argument was that in this context implementation would be impossible. The NREGA sought to create real opportunities and legal spaces, with the belief that people will begin to push to overcome bureaucratic and political resistance. The electoral endorsement over, it is a good time to begin to examine this aspect of bottom-up implementation. Does the rights-based approach really work?

The Act has a number of “trigger mechanisms” designed to activate and establish people’s entitlements. One such trigger is the right to have a Job Card. The Act mandates that anyone who applies at their Panchayat for a Job Card must be given one within 15 days. Without a Job Card, people cannot even apply for work, nor corroborate the records. It is a “license” and “pan card” of the wage worker’s family, with a record of days of work and wages received during the year. There are many States where large numbers of people have demanded, but not received, Job Cards. In many Panchayats, the Job Cards are in the control of implementing agencies. Publicising the Job Card as a record of individual entitlements, to be updated by the authorities, and kept in possession of the workers, would ensure the NREGA is monitored by its workers.

Crucial accountability

The application for work and the dated receipt are crucial to trigger the demand for work. The receipt is also the basic record for claiming unemployment allowance if the work is not provided within 15 days. States like Rajasthan have fared well in providing Job Cards, and providing work within 15 days, but resistance to giving dated receipts has become a massive problem. No State has effectively activated this important mechanism. Nevertheless, it has worked when workers groups have got organised.

In the 30 years of existence of its precursor, the Maharashtra Employment Guarantee Act, there is no recorded instance of payment of unemployment allowance. The NREGA has already recorded payment of unemployment allowance to large numbers of workers in chronically poorly-administered areas. The successful people’s struggles for the payment of unemployment allowance — in Barwani District of Madhya Pradesh, Raichur of Karnataka, Bolangir, Navrangpur and Kalahandi of Orissa, Latehar in Jharkhand, Sitapur District of UP — has been a breakthrough in accountability, and an inspiration to other workers struggling for entitlements. The payment of unemployment allowance emanates from an administrative lapse, and is eventually deducted from the pocket of erring officials. It is not a freebie doled out of the government exchequer. Like the Right to Information Act, this has created an important mechanism for enforcing the right while holding the bureaucracy accountable.

The wage under NREGA has been another trigger and indicator of its success. The wage rate, the measurement system, and the timely payment of wages have all become part of the entitlement package. Thanks to NREGA, minimum wages have, for the first time, become a real factor in determining the lower limit for market wages. There are many ongoing struggles for the payment of minimum wages; and adopting a transparent measurement system for every work-site is a management challenge that has thrown up many grassroots solutions.


Wage payments through NREGA have initiated the biggest “financial inclusion” drive, with the requirement that all wage payments be made through banks and post offices. The engineers, the accountants, and the post offices have been unable to cope, and late payments have begun to cripple the Act. Students and Academics, working together with workers’ organisations in Khunti District in Jharkhand, have operationalised the entitlement in the NREGA to get Rs. 2,000/- per worker paid to over 300 workers as compensation for delayed payment under the provisions of the Payment of Wages Act. The Khunti payment, made last month, has once again demonstrated that the solution to the vexatious issue of late payments lies in the entitlement framework.

The uneven implementation in different States has shown that where people’s struggles have gained political and administrative respect, the NREGA has shown tangible results on a massive scale. It is that battleground of struggle that could well determine the future of the political discourse in this country.

The Government of India has transferred adequate money to the States and Districts to make timely wage payments. Shri C.P. Joshi, the current Union Minister for Rural Development and Panchayati Raj, was reported to have talked about his party prospects in the polls being negatively affected because of late wage payments in Rajasthan. As Union Minister now, if he were to exercise his administrative and political will to ensure compensation is paid to those receiving delayed wage payments, the lethargic bureaucratic system will find a way to respond. Chronic delays in wage payments during the drought in Rajasthan became a political issue, and the delays were wiped out. Innovations and mechanisms respond to a bottom-up demand, but do so best when the political establishment puts pressure.

The NREGA also assures an adequate, realistic provision for administrative expenses. At the current six per cent of total costs which has been allowed for administrative costs, there is no legitimacy in citing a shortage of staff or resources for bureaucratic delay. In Rajasthan, for instance, the over 7,000 crores spent on NREGA last year amounts to a massive Rs. 450 crores available for administrative expenses per year. This kind of money and resources can, in fact, help gram Panchayats become properly resourced to better carry out their overall responsibilities. It can also help ensure that there is no excuse for the failure to carry out all transparency measures and put an effective grievance redressal mechanism in place.

Biggest contribution

Transparency and accountability to the poorest and the weakest is in fact the biggest potential contribution of the NREGA to the entire governance system. The NREGA is an outstanding example of how the RTI Act can be woven into the fabric of the delivery system and the whole legal and governance paradigm. The entire expenditure on works and workers — 94 per cent of the total amount — is required to be put on the website of the NREGA, with every transaction revealed in detail. This can easily be increased to 100 per cent. Using this Management Information System (MIS), Vijaypura Gram Panchayat in Rajsamand District has begun to build a Janata Information System (JIS) painted on the walls of government buildings in the Gram Panchayat. The boards reveal the details of the number of days of work provided and payments made in the year to every Job Card holder in the Panchayat. Also painted on the walls are the list of works sanctioned, the expenditure on labour and material, and item-wise expenditure on material in each work in the Panchayat, including exactly how many bags of cement, sand and trolleys of stone were procured, and at what rate in the Gram Panchayat. This is like a web wall which reveals to every interested visitor all that they want to examine.

What can be done in one Panchayat can be carried out in the 9,189 Panchayats of Rajasthan, and the hundreds of thousands of Panchayats in India. The walls in Vijaypura Panchayat provide details of 976 families given employment in 2008-09, where two thirds have completed 100 days, with an expenditure of 91 lakhs. The Sarpanch is a Dalit youth from a poor family, elected in a general seat, and the Panchayat is proof of how well an Employment Guarantee programme can be implemented, in terms of people’s entitlements, transparency measures, worksite management, and many other innovations.

Larger impact

If the millions of financial transactions of the NREGA can go on their web site, there can be no justification for not following the example and putting almost every financial transaction of government — receipt or expenditure — on the web sites of the relevant department or agency. Proactive disclosure is a requirement of the RTI Act, and is a good example of the larger potential impact of the NREGA on governance.

The NREGA is India’s first law to codify development rights in a legal framework, and like the RTI, it has begun to set an example in a global context. Apart from the law, and a set of guidelines, there is a strong and immediate need to formulate rules to operationalise provisions in the Act; which includes guaranteeing grievance redressal in seven days, social audit twice a year, and mandatory transparency and proactive disclosure. Properly incorporated and enforced, a comprehensive set of operational rules could strengthen the entitlement framework, fixing responsibility at every level. Once again, it would enable bottom-up pressure for implementation, which should be matched by a strong political mandate. Today, the NREGA has millions of workers’ unresolved and un-addressed grievances and problems to be dealt with. A response system could not only radically improve the NREGA, but can impact and transform the whole face of rural governance. NAREGA2

Is the NREGA an administrator’s nightmare or a redistribution of income and power? A social safety net or a step towards the right to work, to prevent migration, and even boost local market economies? For those who cannot think beyond the pale of the free market economy and the business model manager, it is indeed a nightmare. For years, simplistic management solutions to poverty, with the poor as an input to be managed, have failed. We cannot see ordinary people as active participants and empowered citizens. That is why there is difficulty in understanding the practice and logic of democracy and difficult, therefore, to understand the realistic detailing and complexity of an Employment Guarantee initiative.

Inclusive growth Independent India has to acknowledge the critical role the NREGA has played in providing a measure of inclusive growth. It has given people a right to work, to re-establish the dignity of labour, to ensure people’s economic and democratic rights and entitlements, to create labour intensive infrastructure and assets, and to build the human resource base of our country. For the first time, the power elite recognises the people’s right to fight endemic hunger and poverty with dignity, accepting that their labour will be the foundation for infrastructure and economic growth. The entitlements paradigm is still to be established in many States in the country. Second generation issues like the expansion of the categories of permissible works needs to be taken up with labour and the deprived continuing to be the central focus. The improvements must be to strengthen, not divert from these basic tenets. In the midst of the current economic slowdown, there is enough evidence that this kind of commitment can work to help reduce the slowdown.

The political class would do well to understand that the most important solution is an assertion of its will to respond to people’s voices. The many wise, creative, and innovative initiatives emerging from theory and practice have a future only if they are owned by the people and implemented with justice. The NREGA can give people an opportunity to make the entire system truly transparent and accountable. Properly supported, people’s struggles for basic entitlements can, in turn, become the strongest political initiative to strengthen our democratic fabric.

Aruna Roy and Nikhil Dey are activists with the Mazdoor Kisan Shakti Sangathan (MKSS).

Email: arunaroy@gmail.com,