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Last Updated: Wednesday, 26 September 2007, 11:18 GMT 12:18 UK
India job scheme 'disappointing'
By Soutik Biswas
BBC News, Delhi

Indian farmer
Villagers build local infrastructure under the scheme
India's most ambitious scheme ever to lift people out of poverty has met with largely disappointing results in its first year, studies suggest.

The $2.2bn scheme, which was launched by the Congress-led government in 200 districts, guarantees 100 days of work a year for every rural home.

It has been described as India's New Deal for the poor in a country where 70% of its people live in villages.

Critics say the scheme squanders public money and builds wasteful assets.

The National Rural Employment Guarantee scheme was launched in February last year to provide employment to millions of people in India's poorest villages to work on building local infrastructure like village roads, small dams, ponds and buildings.

Uneven progress

Supporters of the scheme insist that it is essential to bridge the growing gap between the rich and poor in developing India.

Critics counter that it is a mere retread of similar programmes in the past which have been plagued by corruption and lack of direction.

The report card of the first year of the scheme - April 2006 to April 2007- culled from various parts of the country seems to be largely uneven, though there are some bright points.

The government has pledged $2.2bn for the scheme
Scheme covers 330 poorest districts in the country
Total days of employment generated in 2006-2007: 900 million
Women comprise 40% of the beneficiaries of the scheme
The backward scheduled caste and tribes comprise 62% of the beneficiaries
Employment has to be provided to worker within 15 days of demand

"Judging from available reports, the scheme is not doing particularly well, whether we look at the levels of employment generation, or wage rates, or the extent of corruption, or the quality of assets generated," says leading economist Jean Dreze, who is also a member of the employment guarantee scheme council.

The government spent nearly $2,250m in generating nearly one billion days of work for the people of the poorest 200 districts in India where it has been implemented, according to government data available.

This is substantially lower than a target of generating more than two billion days of work during the same period.

Studies in Uttar Pradesh, India's most populous state, found that the rural people in many areas were ignorant of the scheme because they had not been informed by the officials.

In Chitrakoot, for example, a survey found that most participants were willing to do manual work at 58 rupees ($1.45), the minimum wage payable under the scheme.

But when they were asked who had actually worked, very few people responded.

Top performer

Also, some states have implemented the scheme better than others.

Rajasthan, for example, has been found to be the top performer among all major states - every rural family has got 77 days of work and 67% of the women have got work. Moreover 73% of the funding has gone on wages, rather than other spending, which is much higher than anticipated.

The small north-eastern state of Tripura, run by the Communists, has done even better than Rajasthan generating 87 days of work under the scheme for every rural family in 2006-2007.

Indian village women
Women comprise 40% of beneficiaries of the scheme

There are some surprises too. Kerala, a front ranking state for its human development record and run by Communists, is at the "rock bottom", one study has found.

Analysts say this could be because a lower demand for employment under the scheme in the state rather than a failure to provide.

The scheme seems to have flopped in the western Maharashtra and eastern West Bengal states, the first known for its administrative acumen and the second for its pro-poor Communist government.

The implementation of the scheme by various state government have also dispelled a few traditionally held notions.

One of them is that southern and western Indian states (Andhra Pradesh, Gujarat, Karnataka, Kerala, Maharashtra and Tamil Nadu) routinely perform better than most of the northern and eastern states when it comes to rural development works.

But the employment guarantee scheme shows that only one of the southern and western states - Karnataka- has generated more than 10 days of work for every village family in 2006-2007, while the eastern and northern states have done comparatively well.

Among the positive points, surveys suggest that:

  • Women's share of employment under the scheme is about 40% nationally, rising to a huge 81% in Tamil Nadu. Among the laggards here are Indian-administered Kashmir (4%), Himachal Pradesh (12%) and Uttar Pradesh(17%).

  • Twenty districts have spent more than one thousand million rupees ($25m) on the scheme. Studies suggest many of the benefits are showing in these districts - increased economic security, rising farm wages, slower migration, creation of productive infrastructure and independence of women.

    Indian farmers
    Some farmers are still ignorant about the scheme

    It is still unclear how much the scheme has been hit by corruption, which, like similar food-for-work scheme in the past could wreck its prospects and become, as an expert, said "a horribly expensive gravy train".

    Public funds in Indian rural works projects are routinely embezzled by fudging the work attendance registers, which also serve as a receipt to claim government funds.

    The funds are to be paid to workers based on their attendance recorded in these registers.

    Unscrupulous contractors and local officials usually connive to open up a separate register where worker attendance is recorded on the site of work.

    Workers are paid on the basis of the records of this rigged attendance register, and the funds are claimed using records in the other register. The difference is pocketed.

    Transparency safeguards

    Jean Dreze says the scheme's transparency safeguards, helped by the landmark right to information law, can go a long way in preventing corruption.

    A recent verification of workers rolls in two districts in Chhattisgarh found that 95% of wages paid according to the workers registers had actually been received by concerned workers.

    Indian farmer
    Some say the scheme could be a "horribly expensive gravy train'

    "This is a significant achievement, especially in contrast with massive levels of fraud observed in the same area two years ago under the federal food for work programme," says another study.

    At the same time, a verification of the attendance registers in a district in eastern Jharkhand state last October found that only 15% of the wages paid had actually reached the workers.

    "It is wrong to say the scheme is a failure. It is doing better than earlier employment schemes, though the yearly report card has been uneven," says Jean Dreze.

    There is an interesting political sidelight to the scheme - early data is showing that three of the top performing states - Rajasthan, Madhya Pradesh and Chhattisgarh - in terms of generating employment are ruled by the opposition Hindu nationalist Bharatiya Janata Party (BJP).

    With speculation of early elections in India, this may not be good tidings for the governing Congress party, which gave birth to the scheme.

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