The Praful Bidwai Column December 27, 2004
UPA Betrays Its Biggest Promise Mocking at job guarantee By Praful Bidwai The single biggest promise made by the United Progressive Alliance on taking power was to "provide a legal guarantee for at least 100 days of employment, to begin with, Š every year Š at minimum wages for at least one able-bodied person in every household". This was not a casual pledge, but reflected a solemn commitment made by the Congress right since 2002, and reaffirmed by Ms Sonia Gandhi at least five times. The Employment Guarantee Act (EGA) was meant to distinguish the UPA from its predecessors' economic policy and create a great social bridge. A guaranteed right to work would heal the rift between the poorest people and the not-so-poor. It would try to reconcile the elementary human aspirations of the wretched of the Indian earth with the lofty ambition of the privileged to make India a Great Power. Regrettably, the UPA started diluting the EGA's scope early on. It whittled down its coverage to rural areas only-as if there were no grinding poverty in our towns and cities! It also redefined "households" to cover only those who share a dwelling or have a common ration card. Thus, just one person in a family would get work regardless of whether it is nuclear (with 4 to 5 members) or joint (with, say, 8 to 15 members). Then, the UPA further confined the EGA's scope to just a quarter of India's districts with no promise of extending it nationally. All this ran roughshod over the draft thoughtfully prepared after wide consultations by the UPA's own National Advisory Council, comprising highly accomplished social scientists and activists with roots among the rural poor. Now, the UPA has tabled a Bill which mocks at the very concept of an employment guarantee. The Bill allows the government to switch the scheme on or off at will-without assigning any reasons. This parodies the notion of a right! Clause 3.1 of the Bill says state governments shall provide employment "in such rural areas Š and for such period" as may be "notified by the Centre". The employment "guarantee" does not have universal eligibility. It only covers households below the poverty line (BPL). And it does not even assure them the rate specified by the Minimum Wages Act, 1948. There's no hint of the scheme's extension to the whole of India! To appreciate the comprehensive character of the betrayal of the UPA's promise, it's vital to understand the EGA's rationale as a social security measure and examine the arguments for and against it. The case for an EGA arises from three considerations. First, there exists structurally caused and socially determined mass poverty and deprivation in India. So a person who is willing to perform even the most unskilled of manual labour, much like a draught animal, cannot find work. Millions are forced into chronic poverty for no fault of theirs other than their birth in underprivileged conditions. Society has failed to redress this for decades. This is an unacceptably unjust waste of valuable human potential. It is society's duty to empower the most unfortunate among the poor by providing employment to them. Second, "normal" economic processes cannot resolve the problems of chronic poverty, unemployment, all-round poor social indicators, and depleted human capacities. Such processes will perpetuate or reinforce, they won't redress, the underlying structural causes-irrespective of GDP growth! One great theorem of Development Economics is that public action through special programmes is indispensable for this. This is especially, cruelly, true of depressed areas. But it is also true of many areas of relative rural prosperity, like Punjab, Haryana or coastal Andhra. Surveys show that men and women even in Haryana find agricultural work for less than 50 days a year and non-agricultural work for respectively 70 days and just 3 days! At the same time, rural landlessness has steadily grown. It stands at 40 percent-plus nationally. Third, recent economic growth in India has been perversely jobless. Earlier, 4 to 5 percent GDP growth would generate roughly 2 percent employment growth. Today, a 5 to 6 percent GDP increase produces just one percent more employment-or only about half the yearly increase in the number of job-seekers. Most recent schemes, including the Jawahar Rozgar Yojna and food-for-work programmes haven't remedied this perversity. Most such schemes, like the earlier Integrated Rural Development Programme-which, for instance, gave cheap loans to buy goats where there was no grazing possible!-are badly designed, top-down in nature, and implemented with remarkable callousness and no transparency. They must be reformed, supplemented or replaced. The EGA is probably the best complement/replacement for them. Its main attraction is that it alters the balance between the government and poor people by giving them entitlements-unlike other schemes which depend on the government's whims or, more rarely, concern for people. That's precisely why Professor Amartya Sen calls the EGA an "enormously important instrument" of empowerment. Yet, many critics have attacked both the concept and the scope of the employment guarantee idea on many grounds. Some argue that it's outrageously expensive and will cost 4 to 5 percent of GDP. Others hold that its scope must be narrowed to the very poorest by lowering the wage rate. Yet others say it's a wasteful populist measure that will create a "nanny state". One commentator goes as far as to say it'd be better to drop a few thousand crores in Rs 5 or 10 coins by helicopter than to run an EGA. These arguments are largely specious. Many of them have been empirically discredited by Maharashtra, the first state to introduce the EGA. The Maharashtra scheme saved tens of thousands of lives during the terrible droughts of 1973-74 and 1977-78. For many, it represented the difference between starvation or one meal a day, and two meals. It was subsequently diluted, but it still covers the whole state, and offers universal eligibility and an alienable right to work (albeit at a low wage of Rs 45) or, alternatively, an allowance-a quarter of the wage-rate for the first 30 days, and after that, one-half the rate. There is an urgent need to upgrade the Maharashtra EGS, not to scrap it. As for the national EGA, it will at maximum cost Rs 40,000 crores a year, not Rs 200,000 crores as wildly speculated. This is just 1.2 percent of GDP-a small price to pay for empowering hundreds of millions. There is both an ethical and an economic need to peg the lowest wage to Rs 66, the present minimum rate under the Sampoorna Grameen Rozgar Yojna. The function of a minimum wage is to set the floor under which rural incomes must not fall. There must be such a floor if India's villages are not to remain an abyss of poverty and wretchedness. There must be a special preference in the EGA for women. Or else, they will probably be excluded because there is only one job available per household. Above all, however, the scheme's coverage must be extended to cover all rural households, not just BPL families. So-called targeting tends to work against the poorest. India's recent experience with the Public Distribution System for food shows that BPL households are hard to identity. Local power structures are such that the privileged can bully the rural bureaucracy into including them, not the poor, under the BPL category. It's better that some non-poor are wrongly included that the poor are excluded from a universal access scheme. If the UPA is serious about redeeming its promise, it must revise the unacceptable clauses in the latest Bill. It must in particular amend the clause pertaining to transparency, which requires that information about the scheme can only be accessed on paying a fee. Equally deserving to be deleted is Clause 34 which empowers the government to amend both the basic features of the scheme and the conditions of guarantee and workers' entitlements. The UPA won't find it easy to retain the spirit of the EGA by making all these amendments. Many forces and individuals in it are opposed to any deviation from "free-market" neoliberal policies which might help the poor. Some have openly expressed their scepticism, including Planning Commission Deputy Chairman Montek Singh Ahluwalia, Finance Ministry bureaucrats and a whole gaggle of Right-wing market analysts like Surjit S. Bhalla parading themselves as "expert economists". The real issue is whether neoliberal voodoo economics prevails, or poor people's interests do. For neoliberals, it's never pertinent to ask how and why the affluent benefit from the 14 percent of the GDP that currently goes into subsidies. The larger question is whether mass poverty is compatible with a half-way decent, democratic society. To get the UPA to correct course, its topmost leaders must intervene. Ms Gandhi has already made her stand clear by endorsing the NAC's worthy draft. It's now Dr Manmohan Singh's turn. The UPA's survival, credibility and legitimacy demand that the Bill be amended radically by reference to a Select Committee. History won't forgive a lapse or failure here.-end- _________________________________ Labour Notes South Asia (LNSA): An informal archive and mailing list for trade unionists and labour activists based in or working on South asia. 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