<p>The Mahatma Gandhi National Rural Employment Guarantee Scheme has been in operation since 2006. The purpose of this scheme is to ensure employment and income support at the most basic levels to the poor, particularly in rural areas. Also, this is a sort of support/minimum wage phenomenon, with built in dearness relief.<br /><br /></p>.<p>In 2013-14, a total of 74 million individuals in 48 million households in rural India were employed and each of them received for an average of 46 days of work, a sum of Rs 6,900 as additional family income. This has facilitated steady increases in rural wages at an annual rate of 18 per cent and more (economist I S Gulati’s findings), and has resulted in all round wage increases in the country, including in urban industrial and construction sector. <br /><br />Also, this has contributed to addressing the structural wage inequality problems in the Indian economy. As a result of these recent happenings, India has lost its status as a low wage economy and thus, there is an increase in the cost of India’s manufacturing and exports. This is a source of worry for the corporate sector and its political supporters.<br /><br />The increased income opportunities in villages are contributing to lowering of migration to cities and have lessened the availability of labour for unskilled jobs, as domestic helps, shop assistants, transport sector employees, construction workers, truck loaders etc. Or, the profit expectations among corporate leaders are getting halted. <br /><br />This worry is working to influence the government which is seeking to be business friendly. Facilitating lower wages and access to labour is a policy preference, an element in the package of business friendliness and in the effort to lull middle classes into further complacency and gathering their electoral support.<br /><br />Studies have shown inefficiencies manifest in the MNREGS. And there are systemic difficulties in remedying these inefficiencies and are thus getting described as wasteful and becoming less than preferred in decision making circles. If this pro-poor expenditure, often called waste, is avoided, more funds may be available for government spending and more electricity, water and land would become available for the corporate sector, all a welcome development for profits and ease of doing business. <br /><br />But in contrast, the MNREGS, a rather social sector spending and putatively less than par productive, will provoke higher levels of government spending and therefore, garnering of higher tax revenues, a rather unwelcome prospect provoking an element of opposition.<br /><br />Scheme’s successes<br />The works accomplished through these are quite often not satisfactory, though it has made some achievements. Some of these successes are in watershed development, soil regeneration and minor irrigation, all promoting agriculture and rural well being. As of now, post May 2014, the government is of the view that more backward regions have to be covered by this scheme instead of the entire country and this dilutes the self selection nature of the beneficiaries.<br /><br />And those who are willing and need this type of employment, are out of reckoning for purely reasons of location and this tweaking may become the thin end of the wedge to close the programme by gradually chipping off the allocations. <br /><br />Also, there is a proposal to increase the material component of the allocation and complementarily reduce the wage component. This may benefit suppliers and intervention by contractors and freeing the scheme from contractors has been an important merit of the MNREGS. The contractors’ lobby may quite be exerting pressure effectively to dilute the scheme.<br /><br />Increased incomes at the lowest levels mean a gradual imbibing of autonomy by individuals and to that extent a systemic opposition to the traditional vested interest land lords and money lenders will set in. The prospects for subtle and clandestine child labour and bonded labour will further decline. The village social political economic structure will acquire a more democratic whiff, quite unwelcome to the traditional ossified feudal and caste hierarchies in India.<br /><br />The MNREGS works are, policy-wise, to be planned at the level of the village councils, have to become democratic and this may reduce the pro-rich warping prevailing in villages and naturally such developments will entail the opposition from the entrenched interests. This planning needs hand holding support from local engineering and administrative bureaucracy and the latter may well avoid it in their pursuit of richer pastures regarding government spending programmes. <br /><br />The nexus between bureaucracy and local political leadership will thus treat MNREGS in by no means earnest ways. Despite these political difficulties, MNREGS has to be improved in every sense and the rural poor have to become better economically and politically.<br /><br />(The writer is a former professor, Maharaja's College,University of Mysore)<br /></p>
<p>The Mahatma Gandhi National Rural Employment Guarantee Scheme has been in operation since 2006. The purpose of this scheme is to ensure employment and income support at the most basic levels to the poor, particularly in rural areas. Also, this is a sort of support/minimum wage phenomenon, with built in dearness relief.<br /><br /></p>.<p>In 2013-14, a total of 74 million individuals in 48 million households in rural India were employed and each of them received for an average of 46 days of work, a sum of Rs 6,900 as additional family income. This has facilitated steady increases in rural wages at an annual rate of 18 per cent and more (economist I S Gulati’s findings), and has resulted in all round wage increases in the country, including in urban industrial and construction sector. <br /><br />Also, this has contributed to addressing the structural wage inequality problems in the Indian economy. As a result of these recent happenings, India has lost its status as a low wage economy and thus, there is an increase in the cost of India’s manufacturing and exports. This is a source of worry for the corporate sector and its political supporters.<br /><br />The increased income opportunities in villages are contributing to lowering of migration to cities and have lessened the availability of labour for unskilled jobs, as domestic helps, shop assistants, transport sector employees, construction workers, truck loaders etc. Or, the profit expectations among corporate leaders are getting halted. <br /><br />This worry is working to influence the government which is seeking to be business friendly. Facilitating lower wages and access to labour is a policy preference, an element in the package of business friendliness and in the effort to lull middle classes into further complacency and gathering their electoral support.<br /><br />Studies have shown inefficiencies manifest in the MNREGS. And there are systemic difficulties in remedying these inefficiencies and are thus getting described as wasteful and becoming less than preferred in decision making circles. If this pro-poor expenditure, often called waste, is avoided, more funds may be available for government spending and more electricity, water and land would become available for the corporate sector, all a welcome development for profits and ease of doing business. <br /><br />But in contrast, the MNREGS, a rather social sector spending and putatively less than par productive, will provoke higher levels of government spending and therefore, garnering of higher tax revenues, a rather unwelcome prospect provoking an element of opposition.<br /><br />Scheme’s successes<br />The works accomplished through these are quite often not satisfactory, though it has made some achievements. Some of these successes are in watershed development, soil regeneration and minor irrigation, all promoting agriculture and rural well being. As of now, post May 2014, the government is of the view that more backward regions have to be covered by this scheme instead of the entire country and this dilutes the self selection nature of the beneficiaries.<br /><br />And those who are willing and need this type of employment, are out of reckoning for purely reasons of location and this tweaking may become the thin end of the wedge to close the programme by gradually chipping off the allocations. <br /><br />Also, there is a proposal to increase the material component of the allocation and complementarily reduce the wage component. This may benefit suppliers and intervention by contractors and freeing the scheme from contractors has been an important merit of the MNREGS. The contractors’ lobby may quite be exerting pressure effectively to dilute the scheme.<br /><br />Increased incomes at the lowest levels mean a gradual imbibing of autonomy by individuals and to that extent a systemic opposition to the traditional vested interest land lords and money lenders will set in. The prospects for subtle and clandestine child labour and bonded labour will further decline. The village social political economic structure will acquire a more democratic whiff, quite unwelcome to the traditional ossified feudal and caste hierarchies in India.<br /><br />The MNREGS works are, policy-wise, to be planned at the level of the village councils, have to become democratic and this may reduce the pro-rich warping prevailing in villages and naturally such developments will entail the opposition from the entrenched interests. This planning needs hand holding support from local engineering and administrative bureaucracy and the latter may well avoid it in their pursuit of richer pastures regarding government spending programmes. <br /><br />The nexus between bureaucracy and local political leadership will thus treat MNREGS in by no means earnest ways. Despite these political difficulties, MNREGS has to be improved in every sense and the rural poor have to become better economically and politically.<br /><br />(The writer is a former professor, Maharaja's College,University of Mysore)<br /></p>
