The Need for Guaranteed Employment

12/09/2014 11:14 am ET Updated Feb 08, 2015

About 15,000 protesters from across the country descended upon the capital earlier this month to hold a rally at Jantar Mantar. Agitated by the government's proposal to dilute schemes like the Mahatma Gandhi National Rural Employment Guarantee Act, protesters alleged that a pro-corporate agenda is being pushed by the administration.

The scheme, introduced by United Progressive Alliance -- a coalition of centre-left parties whose decade-long tenure was marred by high profile corruption scandals that created a credibility crisis -- has been a means of livelihood for 170 million people living below the poverty line. It has played a significant part in bringing down the poverty line from 37% in 2004-05 to about 22 per cent today.

The reports suggest, among other things, that going forward the scheme will be restricted to 200 most backward districts, instead of 675 that it covers now. The proportion of expenditure too will change from 60:40 to 51:49, for materials and wages respectively. These changes are going to hazardously affect the beneficiaries of the scheme and protesters at Jantar Mantar are not the only ones outraged.

28 leading economists, including Jean Drèze, who helped in drafting the scheme, have written a letter to the Prime Minister expressing concern about dilution of the scheme. "Despite numerous hurdles, MNREGA 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 MNREGA worksites every year," the letter reads.

The implementation of MNREGA has been lackluster and grievances against what is now the world's largest social welfare scheme aren't unique to a particular region. Video Volunteers has reported on the failures of its implementation across the country. Many of these problems stem from low-level corruption, which blocks or delays the flow of wages to laborers.

The new government, whose campaign of anti-corruption and nationalistic rhetoric secured it an unprecedented majority, has, however, set it sights somewhere else: Making India a business-friendly destination for foreign investors and a "manufacturing powerhouse" that will challenge "China's dominance." The press note of the much-advertised Make in India campaign reads, "The Government is committed to chart out a new path wherein business entities are extended red carpet welcome in a spirit of active cooperation."

This business-friendliness may yield fruits but development that isn't inclusive polarizes economic disparity. Economists Jagdish Bhagwati and Arvind Pangariya, who are vociferous supporters of the new government, recently argued how dilution of MNREGA would help other, more significant government projects in a column for the Times of India. "This vision includes elimination of abject poverty, electricity for all, Swachh Bharat (Clean India) by 2019, 100 smart cities and expanded road and rail networks. Implementation of this vision requires resources," the piece argues.

This argument is dodgy. If the "resources" required to achieve these utopian dreams have to come from scrapping a scheme that has brought down poverty rate in India by 14 per cent, it will result in an inequality boom. Substantial dilution of 'guaranteed employment' by the state in rural areas will also accentuate migration. What Mr Bhagwati and Mr Pangariya conveniently ignore is the imminent possibility of hapless migrant laborers living in urban slums on the periphery of those 'smart cities.'

Restricting MNREGA will affect more than half of the country, worries Aruna Roy, former member of the National Advisory Council and an ardent supporter of the scheme. "Not only unemployment, but MNREGA has also addressed issues of underemployment," she says.

It is convenient to dismiss those who don't give-in to capitalist fantasies as "jholawala economists" -- as a leading columnist recently labelled Jean Drèze and co. -- but it would take more than snarking to tackle the intricate problems of poverty they highlight. This isn't the first time that the idea of a progressive state, glossing over the grim reality, is being prioritzed and packaged in policies.

In the decade and a half preceding MNREGA, when the economy grew dramatically and the middle class swelled, farmers in India sank in debt. The number of in-debt farmers nearly doubled from 25 per cent in 1991 to 48 per cent in 2001 and more than 80,000 farmers committed suicide in last four years of that decade. The 'surprising' result of 2004 assembly elections wasn't so 'surprising' when you consider that the Indian Growth Story was confined to 30 per cent of the country.

Congress' campaign of inclusive-growth resulted in a comprehensive Act after their victory -- MNREGA. The implementation of the scheme though, like many other policies of UPA's tenure, remained a problem. But confounding the scheme to only the 200 most backward districts is not going to help. Corruption, something that Mr Modi repeatedly promised to "eradicate" in his speeches, is a corollary to administrative failures, which, again, the new government had professed to extirpate. The promises made by the government in its campaign seem to be selectively suspended when it comes to MNREGA.

MNREGA has had its share of problems, but as economists have written in their letter to the PM, "No doubt, the program 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."

The propaganda machinery is in full swing to discredit the scheme, but if the government discount the poor from its developmental vision, it is going on a trope that is depressingly familiar. Achche din will only dawn upon a small section of the nation. And just like with the Indian Growth Story, at the expense of those left behind.

This blog post is part of a series produced by The Huffington Post and Video Volunteers, in conjunction with the launch of HuffPost India (December 8, 2014). Video Volunteers equips women and men from India's most marginalized communities with skills in video journalism and advocacy, enabling them to expose under-reported stories from their communities and take action to right the wrongs of poverty, injustice and inequality. For more information about Video Volunteers, visit here.