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Planning Commission drafting reforms for NREGA

Primarily to address issues related to spending and implementation

India’s apex planning body is drawing up a set of proposed reforms for the country’s flagship rural job guarantee programme, primarily to address issues related to spending and implementation.

The changes proposed under the National Rural Employment Guarantee Act (NREGA) will be sent to Prime Minister Manmohan Singh by the end of this month for consideration, said Mihir Shah, member, Planning Commission. NREGA assures 100 days of employment in a year for one person from each poor rural family.

“NREGA has created great hope and enthusiasm in this country, but the reality is that we are very slow off the blocks,” Shah said. “We need some radically new architecture of implementation.”

Prominent among the proposed reforms is that on administrative costs. As per the legislation, states can allocate up to 6% of the total expenditure for the scheme on administrative costs, including salaries.

“But there is no clear specification on how the states should spend it,” Shah said. “So, at present, most of it ends up being spent at the state level itself, without much percolating down to the district or panchayat levels.”

Shah suggests reserving 2% of the expenditure for the block and panchayat level and 1% for capacity building.

Rajendra Bhanawat, NREGA commissioner for Rajasthan, said the suggestion, if implemented, would ensure more flexibility at the panchayat level.

“Right now, only about 0.5% is spent at the panchayat level,” he said. “Till now, even the state has only been able to spend about 3-3.5% of its total administrative cost budget, but this year it will touch around 6%...as many posts on a contractual basis have been lying empty, but will be filled.”

Bhanawat also expects any reforms, transparency measures and awareness campaigns to boost expenditure.

The Planning Commission will also suggest heavy deployment of information technology (IT) for better management of the scheme. Andhra Pradesh, for instance, uses technology to ensure that workers employed under the scheme are paid within a week.

In Andhra Pradesh, “the software system is very central and everything passes through the software, from worker registration to work estimates to muster rolls and material purchase,” said Pramathesh Ambasta, national coordinator of the National Consortium on NREGA, a loosely federated collective of civil society organizations to support the scheme. Andhra Pradesh’s statewide network makes NREGA-related information available online within 48 hours.

“So any kind of work is straightaway visible,” Ambasta said. “It is better than a paper system because information is speedy and anybody can see the status, flag delays in wage payments, etc., making it a transparent system.”

Shah said the issue of banking correspondents in every panchayat also needs to be addressed. “By the end of the 11th Plan (2007-12), we should ensure there is a banking correspondent per panchayat and an open inter-operable architecture that is transparent and flexible when it comes to timely wage payments and ensuring zero frauds.”

In terms of the kind of work undertaken, Shah said links among implementation, environment, water resources and livelihood guarantees have to be strengthened. “Productivity needs to be enhanced,” he said. “The success of NREGA will be complete when all workers are rehabilitated to their original livelihoods.”