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Resource centre on India's rural distress
 
 

NREGS and poverty alleviation: Teach them to fish! by Shreekant Sambrani
You see those hills?” Jamshed Kanga, an illustrious IAS officer, then divisional commissioner, Pune, asked the noted development economist John Lewis who was visiting him in 1972, pointing to the barren Sahyadri range behind his office. “I will break every one of those if necessary, but will not let a single person starve.” It was the worst drought in the history of independent India, with a monsoon deficit of 25% from the normal. Maharashtra and Gujarat were the worst sufferers. Kanga was true to his word. Massive relief works, mostly of the nature he had indicated, warded off starvation.

Rajasthan faced a similar calamity in 2009. The western half of the state recorded a monsoon deficit of 42%. It was 31% in the east. Since the state even otherwise has erratic and insufficient rains (40 of the last 50 years suffered droughts), this could have been catastrophic. It averted this through a vigorous and efficient implementation of its various poverty alleviation programmes. The chief among these was the Mahatma Gandhi National Rural Employment Guarantee Scheme (NREGS) [statement of interest: I recently reviewed poverty alleviation programmes in the state for its planning board].

The state spent nearly Rs 13,000 crore on NREGS (90% of the allocation) in three years ending March 2010. The revised allocation for these years was 75% higher than the original amount for the entire Eleventh Plan period (2007-12). Some 90 lakh persons were on NREGS live register, corresponding to well over half the rural households with an average of two members enrolling. Rs 9,200 crore (70% of the expense) were paid in wages for 110 crore man-days at an average wage rate of Rs 83 per day. Employment per registrant amounted to 50-60 days a year and 80-85 days per family, in view of multiple registrations.

Rajasthan’s employment created per household was twice as much as the national average of 40-45 days. Two-thirds of the Rajasthan workers were women as compared to less than half nation-wide. The proportion of SC/ST workers in the total equalled or exceeded the national average.

These are impressive achievements on several counts: First, Rajasthan created the capacity to absorb the greatly enhanced funding. Second, a significantly large proportion of the outlay was actually paid out as wage (remember, Rajiv Gandhi’s 1985 lament that only 15 paisa of the rupee the government spent reached the target population). Third, the social equity consideration forming an integral part of NREGS Act (enhanced presence of women and SC/ST) were also strongly observed in practice. In passing, it must be observed that the disproportionately large representation of women could also signify their bearing an unfair burden of earning the family livelihood.

Several reasons account for this: greatly enhanced resource availability, clarity of design and procedures, committed and reasonably clean political leadership, and dedicated, disciplined bureaucracy vigorously implementing the programme. Some of these factors—resources, clarity and even commitment—are present in other states as well. Yet the Rajasthan performance stands out and is possibly among the best in the country. This goes pleasantly counter to the received wisdom that BIMARU states in India lag behind the rest in delivering development. Yet it would be premature to conclude that at least in Rajasthan the programme is effective in meeting its objective.

The great Chinese sage Confucius said that he gave a hungry man a piece of fish which took care of his hunger for a day. Teaching him how to fish would have taken care of his hunger for life. Poverty alleviation has two dimensions: its manifestation and its causation. Relief activities, feeding programmes and curative medicine address the manifest symptoms of poverty. They are akin to giving the Confucian hungry man a piece of fish. Augmenting assets to enhance their productivity, education and skills training to improve employability on a sustained basis, and preventive medicine together with added nutrition to increase vitality, all attack the factors that cause poverty in the first place and attempt to break the poverty trap. They teach the man how to fish and, hopefully, provide him a fishing tackle.

A Keynesian perpetual employment model of digging ditches and filling them up (or its modern Indian equivalent of rebuilding kutcha roads washed away after the monsoon year after year) may provide relief indefinitely, but does not address the root cause of the problem. Rural connectivity accounted for 40% of the NREGS activities until 2009. Having to undertake drought relief year after every drought year means that there is no drought-proofing worth the name.

Even though the origins of NREGS could be traced to relief works, it has the potential to unleash a proactive dynamics that could help address the causation of poverty. Water and land development works have been accorded the highest priorities in selecting activities under NREGS. There is ample field evidence to show that when these are conducted sincerely and effectively, the impact of even serious droughts on local communities is mitigated significantly.

Connectivity was accorded a far lower role in 2010. The water and land development works taken up under NREGS need to be tracked for their impact on land productivity. That would be the test of the true effectiveness of the programme. Until this evidence is in, the success of NREGS must always be mentioned in qualified terms.

NREGS is as yet in the nature of an entitlement. Conferred by government fiats, it could create dependencies and sycophantism. Power gained through economic means, be it higher income from productive activities or greater control over local developmental expenditure, is far more lasting and elevating. The ultimate test of effectiveness of NREGS is that it is no longer needed. That would be a true tribute to the valiant fire-fighter Mr Kanga 40 years on.

Even as Rajasthan needs to be complimented on its considerable achievements in NREGS, it needs to be aware of the much greater challenges that lie ahead. Fishing tackles are not easy to provide, nor is training for fishing simple.

The author has taught at IIMA and helped set up IRMA