Here is an excellent investigative piece full of very human stories on what I think is India's first and only economic safety net for its citizens. Launched in 2006 via the National Rural Employment Guarantee Act (NREGA), it promises 100 days of employment to one member of every rural household each year. However, things have not gone according to plan and Mehboob Jeelani tells us why.
Until 2004, India had 456 million people living below the international poverty line. Yet after four years of NREGA, the number of poor, which was expected to decline, has increased from 456 to 488 million. So what went wrong? ...
NREGA can appear as a success. After all, some records show the government provided employment to 44.1 million people in the last four years. The Ministry of Rural Development believes it has rescued thousands of farmers from debt through cash payments. The scheme has decreased urban migration by 30 percent, according to a survey by the Centre for Civil Society, and has increased the bargaining power of unskilled labourers, forcing private contractors to pay as much as 130 rupees per day to compete with NREGA. Through the construction of shovel-ready projects, NREGA has also vastly improved rural infrastructure. If the 2009 election results are any indication, wrote Mainstream weekly, NREGA and the money it injected into rural India ensured the re-election of the Congress. Thus, Manmohan Singh became the first prime minister to return to power after completing a full five-year term since Jawaharlal Nehru.
But NREGA hasn’t been an unqualified success. Today, the same welfare economists and grassroots activists who championed NREGA openly criticise it. They contend the government is killing a good scheme. Dreze and Roy think the government, instead of ensuring NREGA’s proper implementation, is watering down the social welfare elements by converging it with other government programmes. Several studies, including governmental ones, acknowledge widespread corruption in NREGA—fabricating vouchers is just one method of diverting funds. Caste-based discrimination is widespread. There is also a lack of political coordination between the Centre and state and local bodies. Most importantly, the promise of 100 days of guaranteed employment hasn’t been fulfilled. This leads one to wonder, four years on, what’s gone wrong with India’s Keynesian scheme?