Arindam Chaudhuri
Rural Emloyment Gurantee - A Distant Dream?
[August, 2005]

If Africa has its Ethiopia and Somalia, India has Bolanghir and Kalahandi in Orissa. To this, the latest addition is Amlashole in West Bengal. According to Buddhadev Bhattacharya, Chief Minister of West Bengal, 'conditions prevailing in many slums in Kolkata are comparable to Amlashole!' West Bengal's ministers and officials, of course, do not accept that any body enjoying the bliss of the Left Front rule, can die due to starvation. However, they have no hesitation to accept death due to disease resulting from lack of adequate medical care and non-availability of medicine. In a state where there is no unemployment benefit and social insurance support, people living on Rs. 170/- per month per head, i.e., Rs. 850/- per month for a family of five (which is true for families living below the poverty line in Dinajpur, north or south), how are the ministers so sure that people living in this 'oasis' of West Bengal do not starve, when market price of rice is Rs. 8 to Rs. 10 a kilo?

Average requirement of rice in rural areas of West Bengal is about 550 gm per person per day for an adult, or about 16.5 kg a month. If children require half the quantity of an adult, then the total requirement of rice for a family of 5 is around 60 kg of rice per month, assuming that 50% of the family members are children. A survey conducted by Planning Commission has revealed that about 32% of people living below poverty line, i.e., about 10% of the population in West Bengal do not obtain food at subsidized rate from the ration shops, due to prevailing corruption. These families have to buy rice at market rate. Even if 50% of the income, i.e., Rs. 425/- is spent on buying rice, it can fetch only around 48 kg of rice, which is 80% of the requirement of the family. This means that at least six days a month, family members suffer from pain of hunger or they literally starve.

This is the case for around 10% of the families in West Bengal's 'starvation belt', dotted with Amlasholes under different names (to be precise, 4,612 villages have been listed by the West Bengal Government where no development worth the name has taken place after 30 years of Congress 'misrule' and 28 'revolutionary' years of Left Front Government's pro-poor policies). In fact, even in the 'prosperity belts', there are hidden pockets of poverty which explains why 17% of the population of India (nearly 170 million Indians) die, before they attain the age of 40. Early death is caused by disease and hunger, a shame for Shining India - for those 20% at the top. This means that, for each one at the top, living in luxury, one at the bottom must pay the price by dying early and starving from pain of hunger throughout their life of 40 years or less, this after 58 years of independence!

On 18th August 2005, the National Rural Employment Guarantee Bill was introduced in Parliament, which promises to give reform a 'Human Face', so claims Sonia Gandhi. The Bill promises to transform rural India by guaranteeing 100 days of employment to one member in a family with a minimum wage of Rs. 60/- a day. Incidentally, it may be mentioned that full employment is defined as 271 days of employment in a year. Therefore, if there is no other avenue of employment, the beneficiary of the scheme will remain unemployed for almost two-third of the working days.

Long long ago, precisely 30 years earlier, a similar scheme was introduced in Maharashtra. It helped to an extent, but not much to write home about. In a recent study undertaken by India Today (August 15, 2005), Maharashtra was ranked 11 just above West Bengal in a list of 17 big states ranked in terms of pro-poor economic growth.

If the scheme is properly implemented, it will reduce the number of families living below the poverty line drastically. Yet, we should note that the study undertaken by Jean Dreze (Loot for Work Programme, Times of India, Mumbai, 02.07.2005), a close associate of Amartya Sen, found massive discrepancies in Food for Work Programme in Surguja (Chattisgarh). Some labourers under the scheme had worked for 3 days, but 60 days of work had been entered against their names in the Muster Rolls. His observation was out of 60 days of wages paid, 3 days' wages went to the labourers and the rest must have been siphoned off. His team of investigators did not find a single work site where legal minimum wages were paid as prescribed in the guidelines. Labourers were routinely paid as little as Rs. 25 or Rs. 30 per day, less that half the minimum wage. He surveyed six districts namely Badwani (MP), Palamau (Jharkhand), Purulia (WB), Sonebhadra (UP), Surguja (Chattisgarh) and Dungurpur (Rajasthan).

In Amlashole, West Bengal, which has been the centre of attention over the last six months, police and the bureaucrats were so daring (thanks to the dysfunctional judiciary and uncaring attitude of the 'revolutionary' administration), that they organized a fair where 'sick' goats were sold to the Sabar tribals, who were sanctioned loans to buy goats and rear them to become self sufficient. Out of the Rs. 20,000 sanctioned, only Rs. 10,000 was handed over. From this amount, Rs. 1,000 was deducted by local Panchayat and another Rs. 500 for political fund. The remaining Rs. 8,500 was spent to buy 14 goats. As these goats were sick, not a single survived.

The above case studies should serve as a warning for those who are going gaga over the present scheme and dreaming of 'Garibi Hatao Phase 2'.

It has been found out by the Planning Commission that 58% of subsidized grains distributed through Targeted Public Distribution System, do not reach the target group. Besides, costs of handling food grains by public agencies are very high. Centre as a result, has to spend Rs. 3.65 to transfer Re. 1 to the poor, i.e., one rupee of budgeted subsidy is worth only 27 paise to the poor (Economic Times, 24.08.2005). This is the cumulative effect of corrupt bureaucracy, criminalized leadership and dysfunctional judiciary, for which we have coined a beautiful jargon "Systemic Failure." If the "Systemic Failure" continues the likelihood is that Rs. 15 to Rs. 16 out of Rs. 60 wage per day will reach the rural poor.

Yet, it should also be mentioned that Jean Dreze found that the Food for Work Programme was somewhat successful in Rajasthan, a BJP ruled state. To quote him, "Muster Rolls were authentic, contractors had been kept out, wages were 'quite' close to the legal minimum and labourers had a favourable view of the assets created under the programme."

Dreze concludes, "The programme can work - but if only the basic safeguards are in place, starting with strong provisions of transparency and accountability."

This columnist has also the experience of working in over 500 villages in West Bengal and Orissa, where Aurobindo Memorial Manav Seva Kendras (AMMSK) were instituted during the past 10 years. Micro-credit was offered to the rural women to use them for productive purposes. Loans were recovered with almost 100% success. One or two cases were there, when we could not recover the money because the women got married and migrated to the villages of their husbands. We believe even in these cases, the loan amount could have been recovered had we followed up these cases in the new villages where the women started a new life.

The money from this micro-credit scheme was utilized by these women for productive purposes and they returned the money at an annual interest of 18%. The scheme was successful due to the close supervision of the utilization of the loan amount.

It may not be out of place to mention that AMMSKs have recently experimented with successful subsidy delivery mechanism, wherein, the subsidy was passed on to the rural poor at a negligible delivery cost (hardly 2.5% of the subsidized amount). A subsidy of Rs. 3 per kg of rice was passed on to some of the identified 'poorest' families in a few villages, when they came to buy rice from a designated shop in the market at a scheduled hour. Villagers were involved in the process of selection of these 'poorest' families. They also witnessed the process of passing over the subsidy through the shopkeeper. This ensured transparency to the system and eliminated any possible corruption. The Government may consider outsourcing the task of identification of BPL families and distribution of subsidy to them. Known honest NGOs like Bharat Sevashram Sangha, etc., may be considered for this purpose.

Successful experiments of employment generation have also been conducted by the Ghatshila (Bihar) branch of Bharat Sevashram Sangha, by having two shops in Kolkata, where the products produced by the village women, in the workshops under their supervision, are sold. A continuous production process is assured if products are successfully marketed. This ensures permanent employment to the people engaged in such activities.

We, therefore suggest, wherever possible, the funds provided through this scheme, should be utilized in cottage and village industries under the supervision of people trained in short-term entrepreneurial courses, with special emphasis on marketing. It is also necessary to open a chain of shops to sell the products of these industries and not remain dependent on the existing shops which may or may not display new products adequately. If production is integrated with marketing, unemployment in rural areas can be liquidated. A similar approach should also succeed in liquidating unemployment in urban areas.

China precisely did the same for town and village industries by successfully selling products of these industries within the country as well as abroad. And the rest is history.
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