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LATEST NEWS UPDATES | Rural jobs scheme — good in parts -Nilabja Ghosh

Rural jobs scheme — good in parts -Nilabja Ghosh

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published Published on Mar 13, 2015   modified Modified on Mar 13, 2015
-The Hindu Business Line

It provides infrastructure and a social safety net, but are there better ways of delivering both?

The MGNREGA has been a subject of controversies from its inception. After much of the public dissension died down, the current government again stirred a hornet's nest by sending out what were perceived to be negative signals on this large public employment scheme. Not only has this raised political questions, it has upset many economists. A group of eminent scholars working within and outside the country penned their anguish at this attitude towards a programme that is finally benefiting the poor, as is revealed by their active participation.

It is time to deliberate over whether the programme fits the needs of the times in meeting aspirations and harnessing the potential of New India. There are a number of nuanced issues at work.

Fundamental questions

The primary cynicism relates to the definition of the term ‘employment' and the engagement of economists with the concept of disguised unemployment. While MGNREGA does offer employment as ‘paid jobs' and represents a ‘contract' between the worker and the employer (which is the state), whether it leads to productive employment is an issue of doubt to many. This is not an easy question to answer because productivity would only be contingent on the use value of the assets created, as it is also linked to a more complex question on whether the asset could have been produced more efficiently with current technology.

The opportunity to produce productive assets with the help of low income groups in the villages undoubtedly is an important aspect. Not all productive works are willingly discharged by private business groups. The creation of assets such as community roads, water works, soil conservation and so on is bound to merit appreciation from farming and other rural households over a period of time. Although in a short period, MGNREGA raises hackles among these groups and even among ministries and departments in the same government, over the availability of labour for other purposes.

However, the question of the quality of work done in comparison to how best it could have been done needs to be answered. Admittedly, such doubts persist in most cases of public works funded by taxpayer money but once these rural works are considered productive, it is important to review the technology, managerial supervision and technical expertise that accompany them and possibly compare with similar such works done in urban areas.

Misplaced cynicism

There is another perception at work: Rural works are a way to employ only unskilled labour and have little to do with technology and learning. This is a reminder of early theories in economics which treated labour as a homogeneous input. Much of development theory is grounded in the idea of a brute force called labour flowing from villages to industries.

Although implicit references to labour services and the use of muscle and brain power were inherent even in earlier reflections, economies and economists have begun to recognise the significance of human capital, a reservoir of differentiated skills and knowledge, only recently. Human capital is enriched not only by the education and healthcare efforts of the government but also by the experience and training of human beings who are endowed not only with muscle power but also with cognitive abilities. Skill, now deemed to be so important in the current government's policy, is acquired by a person at work, as a student, an apprentice or an employee.

In this context it is important to assess the fit or lack of it between the large public works programme with the overall policy of the nation, and to ensure that it does not impose a compromise on skill development of the rural populace.

MGNREGA is, however, meant to be a safety net and a guarantee for human beings' basic right to work for a livelihood with dignity. As a safety net, the offer of a paid job or the payment itself as minimum sustenance regardless of the work is of critical importance in a growing economy. To ensure that it is an employment of last resort is also a sign of development. That large groups of people are found to participate in the programme especially in certain regions amply reflects the state of the economy and its regional imbalance.

Many ambiguities

The issue of seeing MGNREGA as an embodiment of the right to work is fraught with ambiguities although it does provide a legal entitlement to a State job with neither any need for specific qualification nor for migration. MGNREGA appears almost a compulsion due to India's past record in economic performance and the development of human resources. But it is important to ensure that the solution does not become a problem in the future, by intensifying the rural bias in infrastructure and worse, by stalling skill formation.

At best it should exist merely as a safety net, but given the administrative cost of running the programme smoothly without leakage, other forms of safety nets deserve to be weighed against it as an option. Finally, the government needs to do more social evaluation on the productivity of the MGNREGA works and the perceptions of the rural people about employment with dignity.

The writer is with the Institute of Economic Growth, Delhi

The Hindu Business Line, 12 March, 2015, http://www.thehindubusinessline.com/opinion/columns/rural-jobs-scheme-good-in-parts/article6986945.ece?homepage=true


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