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Interviews | Dr. Mihir Shah, member, Planning Commission interviewed by Latha Venkatesh

Dr. Mihir Shah, member, Planning Commission interviewed by Latha Venkatesh

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published Published on Feb 20, 2011   modified Modified on Feb 20, 2011

The National Rural Employment Guarantee Act (NREGA) completed five years this month.

Pandurni village, in Nanded district in Maharashtra, is in high spirits. It has won the award for best performance in implementing the Rural Employment Guarantee Scheme for 2009-10.

Around 1,500 people from this village are registered under this scheme, and over 800 have benefitted from it.

Yahswant Suryavanshi is one of them. This owner of two hectares of agricultural land says water is not scarce anymore, thanks to the well sunk under the NREGA scheme.

Pandurni is a rain fed village which lies near the Maharashtra-AP-Karnataka border. Under NREGA, Projects have been undertaken here that mainly address the problem of drought.

Pandurni has completed over 100 irrigation projects so far. The biggest of these is this rocky bund, which was built by nearly 200 villagers, which has helped control soil erosion.

Officials say NREGA has even stopped the migration of labourers.

Despite these claims, doubts of funds seepage persist. The state has yet to make an analysis of how much benefit the NREGA delives and at what cost per capita

Pandurni is the only village in Maharashtra which figured prominently on the map of NREGA. But one needs to see whether this kind of asset creation is sustainable and whether NREGA can help more people, not just in this village, but the state of Maharashtra to come out of poverty.

Yes, this is one success story, but literature abounds on the many loopholes of the Act.

In an interview with CNBC-TV18’s Latha Venkatesh, Dr Mihir Shah, member, Planning Commission, who has done game changing work in the filed of water harvesting and rural water bodies, speaks about NREGA and gives his outlook going forward.

Here is a verbatim transcript of the exclusive interview on CNBC-TV18. Also watch the accompanying videos.

Q: The NREGA is five years old. Would you describe it largely as a success?

A: This is a programme without precedent. It has achievements also, therefore, without precedent. I would say it is a largest ever employment programme in human history. It has created more work for the poorest people of our country than any other programme since independence.

If you look at the employment generated, if you look at the coverage of the schedule caste and schedule tribe, if you look at the participation of women, if you also look at the financial inclusion that we have achieved, about more than 10 crore bank accounts and post office accounts have been open for NREGA workers. So, I think there is a lot that can be said in terms of achievements.

Q: In all fairness, one has to look at where it has not been implemented. Among the first things that people point out is that when a large amount of money is being spent, to the extent of Rs 40,000-50,000 crore and now with the indexation of the wages this amount could even increase. Necessity to create durable assets is needed. What is the record in terms of asset creation?

A: I think there are major concerns. When I said it’s a programme without precedent, I also meant that therefore it has been so difficult to implement in the real spirit of the NREGA act. What was imagined was a process of participatory planning by people in Gram Sabha and Gram Panchayat, but decisions would be made about what kind of works have to be undertaken, what would be the kinds of implementing agencies that would be employed. It was visualised that the bottom up, people centric programme.

Unfortunately, when you try to implement something so new, based on the same architecture implementation that you had in employment programmes in the past, there are bound to be disappointments.

Asset creation, I think that has been probably the most serious deficiency of the programme, although there are many others as well. But as far as asset creation is concerned, we have studied it in the mid term appraisal of the 11th Five Year plan and we have said that the quality of work has left much to be desired.

Q: What is the Planning Commission’s finding in terms of how much of that Rs 40,000-50,000 crore that is set aside for this project has gone by way of wages and how much has been spent on administration and procuring of materials?

A: As far as the wage-non wage cost ratios are concerned, they have been adhered too very well, there is a 60:40 stipulation in the Act. In fact if anything, they have spent more than 60% on the wages. The problem is not that.

The problem is whether the wages are actually reaching the intended beneficiaries, whether they are reaching in time, whether people are being able to get payments easily, whether there are delays, whether going to the banks in remote rural areas are proved a problem. All these have been major issues. Particularly in terms of leakages, I think the system has quickly devised its own ways of finding ways around the provisions of the Act.

We have had many cases of leakages happening and especially when material costs are being involved the system of procurement, etc of the materials have not been as strong as they should have been. So, there are whole hosts of problems which need urgent addressing.

Q: That’s the point. As soon as an Act gets set processes, set nexus also developed and a contract, politician, administrator nexus has been noticed in several places. Therefore, would it make sense at least on a pilot or on partial basis to make it a pure cash transfer so that at least this nexus doesn’t come in place?

A: You are concerned about creation of assets and that actually is the essence of NREGA. Therefore, it is already a cash transfer, it’s a conditional cash transfer. There is an Act, which specifies the work on which the money must be spent. Therefore, at least we have a system where there is accountability. There are reforms that we can make in NREGA, which we have suggested in the Planning Commission, which are being put into place in some locations where excellent work is also happening where water harvesting structures are being created.

If you make it a direct cash transfer, without any condition attached to it, I am afraid you are opening the doors for these leakages. Whatever systems that we may place in terms of empowering the Gram Panchayat, in terms of having professional human resource support at the Gram Panchayat level, all that emphasis would be lost. We would be then doling off money, it would become reduced to just a dole.

What the NREGA, the potential it really has, which I have been writing about is in terms of actually transforming agricultural productivity in the remote inter lands of this country and then the operation of the multiplier accelerator principal, which has already worked to some extent in terms of the multiplier. When India has come out of the recession which the world has founded so difficult to come out of, the NREGA wages have played a major role. You have created so much purchasing power in rural India that demand is created for the products, which were produced by the Indian industry. That is the multiplier actually, the Keynesian multiplier operation.

What I have in mind is also the operation of the accelerator principal. When large number of laborers who are working on NREGA today, they are small and marginal farmers. More than 70% if the laborers let me tell you are actually farmers who have been forced to work on NREGA because the productivity of their lands have been so decimated over the decades that they cannot make ends meet through farming. What is happening where NREGA is implemented well is that water harvesting structures have been created and industrial productivity is being rejuvenated and these farmers are actually going back to farming.

Potentially, therefore, I would say that overtime the allocations of NREGA after increasing to a certain point should actually start coming down because the requirement for this programme should actually be progressively decreased. That for me would be the real indicator of success of NREGA. If you were to reduce it to a pure direct cash transfer scheme, I am afraid this potential will never be utilised.

Q: We did begin a case study of the NREGA from a village which won an award in Maharashtra, at Nanded. From the administration's point of view, it has become a greener village now, and there are instances of multi-cropping in that village and increase in productivity.

A: If you see the work done across several states of India by the national consortium of civil society organisation of NREGA, exemplary work has been done in raising agricultural productivity, in reducing migration. How will you reduce migration unless agriculture picks up? And not only agriculture, dairying, fisheries, all the allied livelihoods which can be created on the basis of the foundation that of water security that NREGA creates.

MoneyControl.com, 19 February, 2011, http://www.moneycontrol.com/news/economy/nrega-completes-five-years-is-itsuccess_524733.html

Tagged with: NREGS



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