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The Indian Express
August 06, 2005
NO CAPITAL WITHOUT LABOUR
The Rural Employment Guarantee Act, which will provide 100 days'
employment in 150 districts, is only a step in providing relief to
people, 9,000 of whom have been driven to suicide
by Kamal Mitra Chenoy
Why did the promise of an Employment Guarantee Act come into the
Congress manifesto and then in the CMP in the first place?
Because the electoral fate of lauded liberalizers like SM Krishna,
Chandrababu Naidu and Digvijay Singh showed that unemployment and
poverty were among the most major issues for the people. Thus the
anti-incumbency factor in Karnataka, Andhra, and Madhya Pradesh and
not in West Bengal where the Left Front is in its 27th year of power.
Contrary to the official poverty figures that show a decline,
economists using official data and nutrition norms show that rural
poverty is 74.5%, with net foodgrains availability back to the level
of 50 years ago at about 154 kg per capita, worse in village India.
Per capita absorption of pulses and cereals has also steadily
declined, leading economist Utsa Patnaik to dub India ''the Republic
of Hunger''. Unemployment in rural India is rising by about 5.26 per
cent per annum, so the combination of increasing unemployment and
falling consumption is not only increasing rural misery, but also
contracting the market and rural demand. This is aggravated by the
steady fall in the real prices of primary products, an international
trend expected to continue till 2010.
The National Rural Employment Guarantee Act which will provide 100
days' employment in 150 rural districts to begin with is just one
step, though major, at providing relief to the rural people, some
9,000 of whom have been driven to suicide.
The parliamentary standing committee, after hearing expert
depositions, has recommended that this right should be universal not
restricted to those defined as poor or to only one per household, and
should be extended to the rest of rural India within 5 years. It has
laid down that the State's minimum wage should be paid and made
provisions for the primary role of the panchayat institutions.
Together with the Right to Information Act due to come into effect in
October, this will make the functioning of the rural employment act
more transparent and accountable than the food-for-work programme
which has been criticized for its leakages. Thus the outcry that all
money allotted here will be siphoned is misplaced.
What about the expense? A conservative estimate that ignores the
multiplier effect of this employment generating more employment is
Rs. 40,000 crore per year. Not a huge sum, considering that to meet
Plan targets Rs. 100,000 crores have to be spent in each fiscal year
from 2005-2007 for rural development. Funds laid down for less
efficient schemes can be redirected here. India has one of the lowest
direct tax, GDP ratios.
A modest increase at higher levels would even help fund a similar
Bill for urban areas. This potential employment generation would
increase incomes, increasing demand in turn, leading to greater
production and employment-a virtuous circle.
If the definition of 'works' in the Bill is expanded, this rural
labour can be used to build rural infrastructure, all at minimum
wages.
This would lead to a larger, freer market with a level playing field
free from oligopolies like TNCs, domestic big capital which always
skew the market against smaller players in their for- profits, often
failing to deliver as the privatization of power experience in Mumbai
and Delhi has so starkly demonstrated.
A free market that the neo-liberals propagate can only exist between
equals and near equals. A law that provides employment would enable
labour to bargain for wages more in keeping with its contribution to
production, so that the wage floor would rise, again contributing to
a circle of increased demand, production and employment.
The problem is that neo-liberal orthodoxy actually wants to depress
wages and have a reserve army of labour. Thus the business lobbies
demand for labour flexibility just after the police assault on Honda
workers in Gurgaon.
As the New Deal showed in the US in the 1930s, increased public
investment generating increased employment can lead to capitalists
making profits, workers getting employment and per capita GNP rising.
Constitutional imperatives laid down in the Preamble and Directive
Principles would be met, including the right to work, equal pay for
men and women, right to education, against the concentration of
wealth to the common detriment, all would be facilitated by such a
law. It would be empowering.
In the panchayats, the rural labour and women would, by becoming more
economically self-sufficient and simultaneously involved in the
monitoring of the employment schemes, be enabled to exercise due say
in local government.
This is a lot for one law to contribute. If it is implemented it will
be historic.
The writer, a Professor at the Jawaharlal Nehru University, can be
reached at: [EMAIL PROTECTED]
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