Business

It Don't Grow On Trees

Bharat Nirman, Chidambaram's 'achievable' vision for rural India, is running into a quagmire of unclear guidelines and resource deficiency.

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It Don't Grow On Trees
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Koi mantar se nahin hoga, paisa dena parhega, nahin to Bharat Nirman kaise hoga
  • Telephone connectivity for the remaining 66,822 villages. The money will come from the telecom department's USO fund.
  • Electrification of the remaining 1.25 lakh villages and connections to an extra 2.3 crore households. A Rs 16,000 crore five-year project with the same targets was launched on April 5 and capital subsidy of Rs 5,000 crore approved. The power ministry website, however, says 1.4-1.5 lakh villages and 7.8 crore households are yet to be electrified. Since BN target is shorter, more money will be needed.
  • Provide drinking water to the remaining 78,000 villages. Of the Rs 26,000 core needed, the unmet gap is Rs 5,000 crore.
  • Connect all villages with a population of 1,000 (500 in tribal areas) with a road.Of the Rs 28,000 crore fund gap, Rs 10,000 crore will come from the World Bank, the rest is unmet.  

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  • To construct 60 lakh additional houses for the homeless rural poor (15 lakh a year). The uncovered gap is Rs 11,000 crore.
  • Bring an additional one crore ha under assured irrigation. Feasible, since 77 lakh ha was achieved in the Ninth Plan.
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Even economist-activist Jean Dreze is upset over the way his dream project, the draft Employment Guarantee Act (EGA), has changed between the anvil and the shopfloor. Dreze, who "has declined the NAC's (National Advisory Council, headed by Sonia Gandhi) invitation to continue beyond the initial period of one year," says: "In its present form, the EGA is pretty much useless. But we are hopeful. There has to be pressure on the system."

Pending the passing of the EGA and meeting NCMP promises, the first thing the new PM did last year was to launch the NFFWP, which has a budget of Rs 6,000 crore this fiscal. The scheme, however, became operational only this February (circular issued on January 29). Aiming to create at least 100 persondays of employment every year in the 150 most backward districts, implementation of this centrally funded scheme by the states over the past five months has been extremely poor with moderate success spotted only in Chhattisgarh and Jharkhand.

CPI(M) politburo member Brinda Karat, who visited rural Maharashtra as part of the month-long Rozgar Adhikar Yatra commissioned to create awareness about the fundamental right to employment, found that the guidelines, from which "no deviation was permissible", were the worst block. Instead of being calculated at BPL rates of Rs 5 per kg, grains were being given at Rs 10 per kg, she says. This both inflates the cost of the project (resulting in less real allocations) and makes a mess of the guidelines (at least 25 per cent of the wages as cash and a max of 5 kg grain).

Most states prefer cash under such wage-employment schemes, since it is their responsibility to fund the handling and transport cost of grains as well as pay the taxes. But in backward areas like Orissa where FCI presence is scant, workers prefer grains. States decide the proportion of grains and cash where money can be made by interested parties. While the difference between BPL and APL prices encourage unscrupulous traders in grain-starved areas, Dreze and a team of students found that muster rolls were being freely fudged in all of north India, even falsely generated, to siphon off wage money.

Most important, the operations were shrouded in secrecy. Despite the Right to Information Act, it was extremely difficult for them to inspect the muster rolls. (See also A Crying Shame, pg 20-22). Says Dreze: "There's no accountability. The government's commitment has to be judged from performances, not promises."

Planning Commission sources agree that Bengal, despite its self-positioning as a workers' paradise, has one of the worst records in wage schemes (even in midday meals), as the party cadre are in complete control of the beneficiary list. In Maharashtra the wages are fixed according to volume of work (low rates, high volume), so workers have to take helpers leading to a division of the wages and, as Karat says, "women working forfree". There's also confusion over the 13-point BPL criteria—with a court stay on the adoption of revised guidelines, ancient norms are still in force, making anybody with a single light bulb at home ineligible for work. Senior officials also admit that despite the huge perceived demand, the success rate is 60-65 per cent. In short, 30-35 per cent of the money does go down the drain.

This is not to say all rural schemes are useless—nutrition and education schemes like SSA and midday meals are working well except in Bihar and UP. Midday meals are universal in the south and there is progress in Rajasthan and MP too. But as for wage schemes, the Planning Commission, despite being the "protector of the poor", has been debating better ways to help the rural poor for long.

"Food stamps were introduced in the Tenth Plan on a trial basis," says Arvind Virmani, chief executive, ICRIER, who wrote it, "and money was allotted. No state picked it up. That money was unspent." PC referred to it in this budget. There has also been a suggestion for cash transfer to people—quantified at Rs 6,000 a year per family—around the time of the mid-term appraisal: a TCS pilot proposal claims 100 per cent transparency. Sri Lanka operates both food stamps and the Samriddhi cash transfer scheme successfully. States argue that there will be no development work and no multiplier effect, but the honest answer is an "addiction" to the system that benefits all.

Are economists like Surjit Bhalla then right? "Time has come," he says "for honest policymakers to reject policies with large leakage, no matter how much mother's milk they contain." However, like many others, the rural development minister feels it's all a matter of resources. "Some 18 lakh (wage) schemes are going on across the country. A hundred crore mandays are created in a year. At lower levels, corruption is natural, but there's good work happening in Bihar. There's no need to change the system, just double the money."

In such a situation, BN looks like a distant dream. With frantic attempts to bridge the resource shortfall, attract multilateral loans which require stringent monitoring, demerging and merging of various schemes, it may end up as a bureaucratic nightmare. Surely, a new deal for rural India deserves better?

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