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Resource centre on India's rural distress
 
 

Don't blame the implementers by Shubhasis Gangopadhyay
Corruption and government apathy may not be hurting MNREGS as much as well-intentioned tinkering

There is growing concern that the Centre’s allocation for the Mahatma Gandhi National Rural Employment Guarantee Scheme (MNREGS) is dropping off. Correspondingly, the average number of days of work created in some of the states is dropping sharply. This decline in the spending of MNREGS money is not a one-off event but has been happening over the last couple of years. This has raised concern among certain sections of the people in India, who claim that the governments (state and central) are reducing the financial resources necessary to implement this programme. Worse, some say that the impending budget allocation for next year will reduce it even further.

There are three issues that come to mind immediately. First, if prior reports by non-governmental organisations and some commentators are to be believed, this will reduce large-scale corruption. Since money was being stolen from the MNREGS pot, as the pot becomes empty, less money can be stolen. Second, and more serious, if all the money was not being stolen and a proportion of it was being used for the purpose it was intended to serve, then this means there is less money available for the rural poor seeking employment through the MNREGS. The third issue is a bit more complex; some maintain that the increased demand for transparency and accountability is reducing the incentives for distributing the MNREGS money among those seeking work. Almost all the talk about the MNREGS is focused on these three issues.

Let us recall the purpose of the MNREGS. It was originally meant to help poor labourers in seasonal agriculture tide over the lean periods when demand for agricultural employment was scarce. The programme was demand driven; if people wanted jobs through the scheme, they had to be given them. Indeed, the whole purpose of making it into an Act was to ensure that state governments could be hauled up if such demands were not met. Suppose that the MNREGS was being properly implemented and that economic growth was leading to greater opportunities for productive work among rural labourers. Then one would have expected the demand for MNREGS work to go down, as the work required on this scheme was back-breaking manual labour and the pay was the lowest legally allowed, namely, minimum wage. The fact is that states have been growing, and agriculturalists have been complaining that rural wage rates are rising too fast. If we put the two together, then the demand for MNREGS work should be coming down.
So, if there was no corruption, and the MNREGS was well thought out and implemented, then a decreasing expenditure on this scheme would signal good times. How does this story change if there is corruption? This corruption occurs in two ways: one, money is taken out by the administrators even when there is no work being done; and two, work is being done but the workers are not getting their full entitlement but only a part of it, the remainder being extracted by an official. If the corruption is of the former type, and we are unable to stop it, reducing allocations is a good thing. If it is the latter, then demand for work will fall — not because of growth but because workers find the work too taxing or the pay too little. If corrupt officials are smart, they would not want such an outcome. They can only steal if there is someone asking for work; if the amount they want to steal discourages labourers from demanding work, the officials cannot have anything to steal. In other words, the second type of corruption is not exactly compatible with rational behaviour of the corrupt. Unless we have a third possibility — workers do not work but share their wages with the officials. Here again, reducing the amount in the pot, or the MNREGS allocation, is a good thing.

There is yet another possibility. Recall that, for the MNREGS, if a worker demands work, administrators have to find work within a stipulated time. If not, the state government has to pay regardless of the fact there was no work commissioned. The inability to provide employment could be due to the fact that it cannot be any work — but only particular types of activity, listed by officials and activists sitting in air-conditioned offices in Delhi. This tying up of village asset creation with what should have been a pure support to the poor during a period of no employment demand is what has killed a good plan before it could be born. The MNREGS, when it was first conceived, was to be a simple scheme with a built-in self-selection mechanism to attract only those people who needed the money.

However, that simple and easier-to-implement scheme has systematically been rendered useless by all the requirements for asset creation and the process by which such assets can be created. This has not only obfuscated the process and, hence, made it opaque, but also increased the workload of the officials implementing the MNREGS. Since this increased workload is in addition to whatever else they have to do, the only incentive that works is their ability to extract a part of what they are distributing. Indeed, instead of empowering the poor labourer to be able to stay at home during the lean period, it has handed over to the local official the power to decide who stays and who goes and works in the city.

In other words, before we criticise the government for reduced allocations and the administrators for dereliction of duty and being corrupt, we may want to ask why this is happening. A scheme can fail to achieve its desired outcome in two ways — either the scheme is bad or its implementation is faulty. Makers of programmes are quick to find fault with the implementers rather than with the programme itself.

The writer is research director at the India Development Foundation and director of the School of Humanities and Social Sciences at Shiv Nadar University