Warts show up in Centre’s flagship NREGA

ÜIn Khunti sub-division of Ranchi district, workers did not receive wages under the National Rural Employment Guarantee Act (NREGA) for months. It took a survey by a team of Delhi students to reveal the delay, and weeks-long persuasion and agitation by activists to force authorities to release the payments.

ÜSeveral tribals in Orissa have found an innovative way for raising a quick loan from the local moneylender: pledge their NREGA job cards to him and take an advance. They only have to sign occasionally on records to show they work on a project under the NREGA; most of the time they don’t know what and where the work is. The moneylender, in league with the local junior engineer and other officials, claims payments against the fake muster rolls.

ÜIn some villages of northern Kerala’s Wayanad district, workers are employed at private farms, mostly owned by rich farmers, but paid by the government under the NREGA.

The UPA government committed Rs39,100 crore to its flagship social sector programme, the NREGA, in this year’s budget. But any expansion of the scheme must be preceded by strict remedial measures and institutional mechanisms to fix glaring loopholes of the first phase, say experts.

Case studies, such as those cited above, show that the NREGA is riddled with inefficiencies, corruption and lack of accountability, prompting experts to demand immediate action by the government to improve the Act. Failing this, they say, the rural employment scheme could end up like other government initiatives — corrupt, mismanaged and failing in its explicit purpose of improving the lives of the poor. The scheme, launched in February 2006, initially covered 200 districts; by the end of 2008, it covered 593 districts. The financial outlay in 2006-07 was Rs11,000 crore.

“The implementation of the NREGA has been uneven across the country... The first priority of the government must be to ensure that the basic framework is in place... and that citizens in rural India can exercise their right to work on demand, minimum wages, timely payment, etc. Short of that, it is meaningless and distracting to talk of NREGA 2,” a group of NGOs and experts said in a statement on August 5.

“I am a little nervous about this NREGA-2 talk. For one thing, there is still much groundwork to do for the success of NREGA-1, with its focus on core entitlements like work on demand, minimum wages and payment within 15 days,” says professor Jean Dreze, economist and a leading expert on the NREGA.

Consider the current drought situation, where NREGA could be used as an effective tool against this crippling economic reality. Instead, the employment numbers have gone down in summer, across northern India.

The government’s refusal to be held accountable is a key concern. To address this, experts suggest an independent grievance redressal system for NREGA. “The biggest challenge facing NREGA is the need for an effective grievance redressal system,” says Dreze. “Most of the grievance provisions under the Act have been quietly sidelined, whether it is the unemployment allowance or the penalty clause or the compensation principle. The governments don’t seem to be interested in making themselves accountable to the people.”

Reetika Khera, an economist affiliated to the Delhi School of Economics and working on NREGA and other issues in Jharkhand, points out that “there is no one to hold state governments accountable” for their lapses, such as the refusal to give receipts for applications or work, and failure to provide an unemployment allowance. “The same is true as far as timely payment of wages is concerned. Under the NREGA, wages are to be paid within 15 days. Failing this, labourers are to be compensated as per the Payment of Wages Act, 1936. This norm on timely wage payments is being violated routinely in several states today…There is no accountability and state governments are being allowed to get away with this,” says Khera who, along with Professor Dreze, forced the government  to pay Rs2000 each to 265 NREGA workers in compensation for delayed wages in Khunti in Jharkhand in June 2009. It remains the only instance when the government relented to pay so many people for delayed wages under NREGA.

Says Joe Madiath, who head Gram Vikas, Orissa’s biggest NGO with wide presence across tribal districts: “There is no doubt that no other government programme has worked so well in such a short time. But it is important to have a vigorous independent regulatory authority that is empowered to inspect anyone, anywhere.”

While a recent study by the National Council of Applied Economic Research and Public Interest Foundation suggests that NREGA implementation has been varied across India, all is not lost. In states such as Andhra Pradesh, Rajasthan and Tamil Nadu, the Act seems to be working far more efficiently than in most other states. These states comprise 46% of all accounts (in banks and post offices) opened for rural workers to receive NREGA wages. “This is a great innovation and when this process gets completed it would mean a lot for financial inclusion,” the study says.