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LATEST NEWS UPDATES | Inventing NREGA 2.0

Inventing NREGA 2.0

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published Published on Feb 10, 2012   modified Modified on Feb 10, 2012
-Live Mint
 
Never in the history of India has a welfare programme of such scale been launched before. As the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) enters its seventh year, its statistics are staggering. In 2011-12, 37.8 million households were provided employment and 1,208 million persondays of work were generated. In its scale and ambition, the programme is pharaonic.

If the programme succeeds in its mission—and that is still a distant dream—it would indeed go a long way in ending the misery of India’s masses. In an interview given to Mint last week, Union rural development minister Jairam Ramesh appeared confident about MGNREGA’s prospects. He highlighted three achievements of the programme: rising rural wages, reduced incidence of distress migration, and creation of community assets. He also highlighted some of the shortcomings of MGNREGA, two of which have been reported extensively— corruption in the programme and its patchy coverage in different parts of the country. If anything, the weaknesses highlighted by the minister—formidable as they are—can still be managed. With Ramesh at the helm, there is hope on this count. The problems lie elsewhere.
The fundamental problem with MGNREGA is with its successes; these are divorced from the economy at large. Two interlinked issues can be listed. One, wages are not linked to any productivity increase in agriculture—still the mainstay of the rural India. When wages under MGNREGA are compared with the wildly fluctuating growth in agriculture, the link between wages and productivity is tenuous at best. Skill development (vigorously contested by the minister) is linked to this issue. Two, it is a misnomer to call the structures built by workers under the programme ‘assets’. By definition, an asset can be either exchanged for money on a market or can be used productively to generate output which can then be sold. While community ‘assets’ such as roads, check dams, water harvesting structures are useful, it is not clear how they generate sustainable employment.

India today can be divided into two sectors: a modern, urban, high-productivity sector and a rural, MGNREGA-based, low productivity one. To use an expression from the development literature of the 1960s and 1970s, MGNREGA is turning into an “enclave economy” and a vast one at that. Only the roles have been reversed from that age: at that time, modern, high-productivity sectors were the much-maligned “enclaves”, today it is the other way round.

This would not be a problem, if the programme could sustain itself on its own. It would then be just one more stage in an evolutionary road. But the fact that it is propped up artificially by government money makes it a different species. Hopefully, when the blueprint for NREGA 2.0 is finalized, these issues will be given some thought.


Live Mint, 10 February, 2012, http://www.livemint.com/2012/02/10005718/Ourview--Inventing-NREGA-20.html?h=B


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