Empowering the poor

The yatra was Democracy on Wheels, which mobilised people to fight for a comprehensive Employment Guarantee Act (EGA). It was also Theatre in Action, with skits, songs, slogans, puppet-shows and talks focused on the EGA as a means to the right to life with dignity.

The yatra was backed by over 150 mass organisations and numerous political parties. It ended on July 2 with an inspiring day-long programme in Delhi. Among the participants were former President K.R. Narayanan and Prime Minister V.P. Singh, Rural Development Minister Raghuvansh Pratap Singh, social scientists, activists, and political party leaders.

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The event reverberated with the slogan, Har Haath Ko Kaam Do, Kaam Ka Pura Daam Do ("Work for Everyone, and Full Payment for Work") amidst stirring ballads and moving testimonies by chronically unemployed people.

The EGA is an idea whose time has come. Workers' organisations have long demanded it. Last year, the United Progressive Alliance's National Common Minimum Programme promised to annually provide "a legal guarantee for at least 100 days of employment… for at least one able-bodied person in every household", at minimum wages.

The EGA has since been seen an antidote to India's jobless growth, agricultural stagnation and a fall in rural incomes.

Yet, the UPA has failed to fulfil its promise to implement an EGA. It tabled a "National Rural Employment Guarantee Bill" last December. But this was so outrageously inadequate as to negate the concept of a guarantee.

This Bill severely diluted the draft prepared by UPA's National Advisory Council. It restricted the EGA to select rural areas. Rather than allow self-selection, it targeted "below-the-poverty-line" households, a notoriously slippery category, which excludes millions of poor people.

Under the Bill, the government could switch the scheme on or off at will -- making nonsense of a right. The Bill didn't specify a minimum wage. It bypassed Panchayati Raj institutions and lacked transparency.

It is imperative that the UPA radically revise the Bill and have it passed soonest. Parliament's Standing Committee on Rural Development has prepared a good draft. The UPA must adopt it and thus fulfil its single biggest promise.

Why is the EGA an imperative? It is superior to any employment scheme because schemes can be switched off at will. They create no entitlements, and leave the poor at the government's mercy. An EGA will create judicially enforceable obligations, give the poor bargaining power, and promote accountability.

The EGA is essentially a social security measure. Because poverty and unemployment are socially determined, it is society's duty to provide the minimum means of survival to the underprivileged who cannot find work for no fault of theirs -- despite willingness to perform manual labour.

An EGA will produce numerous social benefits -- the greatest being protecting people from hunger and malnutrition. It would infuse incomes into villages, and reduce migration into cities, besides raising crucial social indicators. It would also raise aggregate demand, and boost the national economy.

An EGA will give economic independence to women, and promote gender equality. It'll create rural assets and revitalise the village economy.

All this will change the balance of power in favour of the poor. It'll help unorganised workers organise themselves.

These merits greatly outweigh the costs. These costs are modest. Professor Prabhat Patnaik argues that a national EGA would cost under Rs 24,000 crores -- less than the one percent of GDP.

By contrast, the non-performing assets being written off by banks total Rs 45,000 crores. Unpaid taxes alone total Rs 90,000 crores.

There is an independent case for the EGA. Those who would like it to be conditional upon reduction of subsidies, or divestment of public sector undertakings (PSUs) misunderstand its social security rationale.

There is nothing sacrosanct about creating or abolishing subsidies, a form of negative taxation. In fact, we need to raise India's tax-to-GDP ratio, which stands at half the level in many Third World countries.

Financing the EGA through PSU divestment means bankrupting the public sector. It confuses stocks (of public assets) with flows (recurring EGA expenditure). The divestment money will eventually come from bank borrowings. The government could also borrow from the same banks. The EGA must be supported -- without ifs and buts.

While drafting a new EGA Bill, the government must learn from the experience with the National Food-for-Work Programme launched last November in 150 districts (of a total of about 650). A survey conducted under Professor Jean Dreze by Delhi University and Jawaharlal Nehru University students in six states shows that the official procedures are flawed and lead to massive corruption.

The scheme's muster-rolls are regularly fudged. The kutcha rolls are authentic. But the pucca versions exaggerate the scope of work, number of workers and wages paid.

In one case, the survey found that people who worked for three days had 60 days entered against their names. In MP, workers were paid half the minimum wage (Rs 59). Contractors, who are debarred, actually run the NFFWP in many districts.

"Many flaws can be rectified", says Prof Kamal Mitra Chenoy, who spent three weeks on the yatra, "by mandatorily placing the muster-rolls in the village panchayat office. This will minimise corruption".

The NFFWP runs best in Rajasthan, argues Prof Dreze, because the Right to Information campaign there is deep-rooted.

The government views the NFFWP as "an experiment". However, the NFFWP's flaws reflect official failures and shouldn't lead to a re-victimisation of the victims of poverty.

The government must enact an EGA with transparency, and universal access to all adults in all districts. The employment guarantee must be irreversible, unrestricted (in the number of days worked), and ensure equal payment to women.

Will the UPA summon the will?

Praful Bidwai is an eminent Indian columnist.