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Resource centre on India's rural distress
 
 

Digging holes
-The Economist
 
A maverick minister lays into a hallowed programme

IT LOOKS like risky politics for Jairam Ramesh, who runs India’s biggest civilian ministry, in charge of rural development, to lash out at his own government’s flagship welfare scheme. Mr Ramesh, who got his cabinet post in July, has sparked a row in the past week over corruption and poor results within a public programme that guarantees 100 days of paid work a year for any unskilled rural labourer who wants it.

Sadly, he is only stating the obvious. India’s biggest single welfare project was launched in 2006 and costs over $8 billion a year. Alone, it eats up over 3% of all public spending, and officials say over 50m households last year got some benefit from it. Supporters say it has helped to lift rural wages—on average workers get about 120 rupees ($2.40) a day—which should mean falling poverty. But in many districts, especially poorer ones, huge amounts are stolen or wasted.

In his office in Delhi, listening to Vivaldi, Mr Ramesh criticises “uneven, patchy” implementation of the scheme. He complains about months-long delays in getting workers paid. And he describes wasteful construction of items such as roads that quickly crumble away. The results, in many areas, fall short of the huge sums spent. Mr Ramesh says he has written furiously to all the states’ chief ministers to highlight the deficiencies.

Too much money ends up in crooked officials’ pockets. The gloomiest estimates, such as one by Surjit Bhalla, a prominent economist, suggest two-thirds of funds might be squandered. That looks extreme, but abuse can be crass. In Gonda, a sugar- and rice-farming district in eastern Uttar Pradesh, an anti-graft campaigner, Brijesh Pandey, claims he has tracked how “ongoing scams” divert a quarter of the jobs funds. Common complaints are of officials who pocket wages signed out for non-existent workers.

Mr Ramesh is still a big supporter of the scheme. But he blames state politicians for ignoring or even colluding in “brazen” theft of central funds by officials of the country’s 250,000panchayats (village administrations), who run it on the ground. His ire is aimed especially against giant Uttar Pradesh. In late October he sent an open letter to its chief minister, Mayawati, saying her administration had ignored 22 demands from monitors in his ministry that she look into graft. He talked of cutting jobs funds for the state or sending in the Central Bureau of Investigation. In truth, neither option is practicable, so Ms Mayawati rebuffed him.

That attack, picking on a high-profile opponent ahead of looming state elections, looks like political opportunism. But at least when Ms Mayawati’s supporters and others dared the minister to take on similar abuse in states run by his own Congress Party, to his credit he did so: on October 29th he accused Maharashtra of rotten implementation of the jobs scheme. Unhappily that state’s politicians, his own political allies, also sent him packing. Internal audits and various investigative teams suggest he could make examples of gross irregularities in over 100 villages in several more states. Other audits are now scheduled to follow.

Why air all this now? Much is about politics. Mr Ramesh, who is close to Sonia Gandhi, the Congress boss, runs a ministry that will dish out huge sums to the poor ahead of elections. He knows urban folk are fed up with Congress over other massive scams and may not be pulled back to the fold. So it will be more pressing than ever to tap huge banks of rural voters. Congress would like the man in the paddy to credit it for rolling out rural welfare—the scheme’s official name, the Mahatma Gandhi National Rural Employment Guarantee, helps with that—but also for fighting graft within it.

Mr Ramesh’s openness, however, could go further, taking on problems beyond corruption. The programme has many supporters, including the World Bank and other international bodies. Poor rural folk like it, a sign that many are indeed getting money. It has brought unexpected benefits to some, including banks: 100m rural Indians have opened accounts so they can receive their wages. And there is tentative evidence of rural lives improving under the scheme, with more land coming under cultivation, dietary habits changing and fewer villagers being forced to leave home in search of work.

Yet even the scheme’s boosters admit to structural flaws. A review published by the ministry in September conceded that the lack of skilled technicians at almost every site, along with rules banning the use of machinery or contractors (labour is usually by shovel), mean that the ponds, roads, drains, dams and other assets are often of wretched quality. The public works do little to better India’s awful infrastructure: many get washed away each monsoon, only to be rebuilt, badly, the following year. Nor are villagers getting together, as had originally been hoped, to decide what they most need to build.

Others grumble more loudly. Private employers, including builders and farmers in Punjab who rely on migrant workers at planting and harvest times, say the scheme pushes up labour costs. And at times workers are simply not available. That may be inevitable, as the most desperate see their incomes rise. More worrying, the jobs scheme gives its workers no skills or training, leaving them as unproductive and ill-equipped for other work as before. Welfare in the villages is welcome; wealth-creating jobs would be better yet.