Below is the content of the Open Letter Written by Economists expressing concerns about the new governments moves on diluting MNREGS.
This letter has been signed by Dilip Abreu, Pranab Bardhan, V Bhaskar, Ashwini Deshpande, Jean Drèze, Maitreesh Ghatak, Jayati Ghosh, Deepti Goel, Ashok Kotwal, S Mahendra Dev, Dilip Mookherjee, R Nagaraj, Sudha Narayanan, Pulin Nayak, Nalini Nayak, Bharat Ramaswami, Debraj Ray, Atul Sarma, Abhijit Sen, Jeemol Unni, Vijay Vyas, and others
[su_dropcap style=”flat” size=”7″]W[/su_dropcap]e are writing to express our deep concern about the future of India’s National Rural Employment Guarantee Act (NREGA).
The NREGA was enacted in 2005 with unanimous support from all political parties. It is a far-reaching attempt to bring some much-needed economic security to the lives of millions of people who are on the margin of subsistence.
Despite numerous hurdles, the NREGA has achieved significant results. At a relatively small cost (currently 0.3% of India’s GDP), about 50 million households are getting some employment at NREGA worksites every year. A majority of NREGA workers are women, and close to half are dalits or adivasis. A large body of research shows that the NREGA has wide-ranging social benefits, including the creation of productive assets.
Recent research also shows that corruption levels have steadily declined over time. For instance, official estimates of NREGA employment generation are very close to independent estimates from the second India Human Development Survey. While corruption remains a concern, experience shows that it can be curbed, and the battle against corruption in NREGA has helped to establish new standards of transparency in other social programmes as well.
No doubt, the programme could and should do even better. But the gains that have been achieved are substantial and amply justify further efforts to make it a success.
Against this background, it is alarming to hear of multiple moves (some of them going back to the preceding government) to dilute or restrict the provisions of the Act. Wages have been frozen in real terms, and long delays in wage payments have further reduced their real value. The Act’s initial provisions for compensation in the event of delayed payments have been removed. The labour-material ratio is sought to be reduced from 60:40 to 51:49 without any evidence that this would raise the productivity of NREGA works. For the first time, the central government is imposing caps on NREGA expenditure on state governments, undermining the principle of work on demand.
Last but not least, the central government appears to be considering an amendment aimed at restricting the NREGA to the country’s poorest 200 districts. This runs against a fundamental premise of the Act: gainful employment that affords basic economic security is a human right. Even India’s relatively prosperous districts are unlikely to be free from unemployment or poverty in the foreseeable future.
The message seems to be that the new government is not committed to the NREGA and hopes to restrict it as much as possible. We urge you to reverse this trend and ensure that the programme receives all the support it requires to survive and thrive.
