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Resource centre on India's rural distress
 
 

Foodgrain-for-work
-The Business Standard
 
Now MGNREGA may bear the burden of PDS' failure

This newspaper reported on Tuesday that the rural development ministry approached the food ministry suggesting that work under the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) be paid for using foodgrain. The impetus for the rural development ministry’s action is perhaps understandable. The Act provides for the possibility of a fraction of wages being paid in kind; the allocation for the MGNREGA has been cut in the 2012-13 Budget; and the food ministry has excess stocks of foodgrain in its godowns, a state of affairs that has shown itself in the past to be a public relations disaster. Some of the scheme’s designers have welcomed the move. Foodgrain, they argue, may not be as easy to divert as cash; and, furthermore, food security for those below the poverty line is essential.

These arguments, however, are confusing on several counts. The most obvious being that if foodgrain is indeed so easy to deliver to a targeted population, why is the public distribution system (PDS) a colossal failure through most of the country? India cannot get its PDS up and running; why is it assumed that the pledge of food security can now piggyback on a scheme that was ostensibly designed for a different purpose? This is part of the continuing effort to tweak MGNREGA assistance into meeting goals for which the scheme was not designed. It was planned as a self-selecting mechanism to ensure that cash transfers and purchasing power reach families that are unable to find regular work. It was not meant to replace the rural job market, which is why linking it to minimum-wage legislation was a bad idea. It was not meant to substitute for investment in agricultural capital, which is why the recent obsession with whether or not it is creating “productive assets” was misplaced. It was not meant to be permanent, but to be a safety net — which is why, as fewer and fewer people in India are desperate, the size of the scheme, and its outlay, will decrease.

However, the United Progressive Alliance seems unable to manage even the slightest degree of coherence. Both food security and the MGNREGA are addressed to the poor: but that is where the overlap between them should end. The MGNREGA is simply not robust enough in most places to allow for the well-understood problems of public foodgrain delivery to be added to its own leakages. This is the most irresponsible sort of fuzzy thinking by the rural development ministry. The food ministry, meanwhile, is understandably panicking that its foodgrain stock is likely to explode this year. But it has seized on the 1970s idea of food-for-work, instead of focusing on reform of the PDS, and more efficient methods of transfer. It has looked to other ministries’ initiatives, instead of recognising that its meddling with the market has led to pulses and vegetables being supply-constrained while foodgrain rots in godowns. In its inability to address the root problems even when it comes to its own ideas, this move shows the extent of the UPA’s governance failures.