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Economists petition Indian PM against MGNREGA dilution

Oct 14, 2014

Restricting the rural job scheme to limited districts will undermine its stated purpose, said a group of development economists.

New Delhi: Alarmed over the Indian government’s proposed amendments to the MGNREGA Act, development economists from India and abroad have written an open letter to the Prime Minister Narendra Modi seeking an assurance against any possible dilution or restriction of the provisions of the job scheme.

Introduced in February, 2006, the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA), promises 100 days of employment every year to each household in the rural areas.

Appreciating the support that MGNREGA provides to crores of vulnerable and poor rural families, the petitioners argue that scheme had wide-ranging social benefits including creation of jobs and various productive assets (like water reservoirs and check dams).

The gains achieved have been substantial and amply justify further efforts to make it a success, the letter said.

Acknowledging that corruption has been a long standing problem in implementation, the petitioners optimistically said that the malaise could be curbed. Quoting a research, the petitioners said corruption levels had steadily declined over time.

“For instance, official estimates of NREGA employment generation are very close to independent estimates from the second India Human Development Survey. While corruption remains a concern, experience shows that it can be curbed, and the battle against corruption in NREGA has helped to establish new standards of transparency in other social programmes as well,” the letter argues.

The petitioners lamented that wages had been frozen in real terms, and long delays in wage payments had further reduced their real value. The letter alleged that MGNREGA's initial provisions for compensation in the event of delayed payments had also been removed.

“The labour-material ratio is sought to be reduced from 60:40 to 51:49 without any evidence that this would raise the productivity of NREGA works. For the first time, the Central government is imposing caps on NREGA expenditure on state governments, undermining the principle of work on demand,” the letter said.

The petitioners have also highlighted that the Central Government’s proposed amendment aimed at restricting the NREGA to the country's poorest 200 districts runs against a fundamental premise of the Act-gainful employment that affords basic economic security is a human right.

The development economists expressed in their petition that even India's relatively prosperous districts are unlikely to be free from unemployment or poverty in the foreseeable future. The letter was signed by prominent economist including Jayati Ghosh, Jean Drèze, Reetika Khera V. Bhaskar, Dilip Abreu and Pranab Bardhan.

Click here to read the full letter.

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