Armchair Economics Duo on NREGA

This is apropos the letter “Do Not Dilute NREGA” by Dilip Abreu, Pranab Bardhan, Jean Dreze et al (EPW, 18 October 2014). Through this open letter to the prime minister, many noted development economists around the world have expressed their genuine concerns over the dilutions that the National Rural Employment Guarantee Act (NREGA) is about to witness very shortly. Among the major amendments that the central government is considering are – restricting NREGA to 200 poorest districts of India and altering the labour-material ratio to 51:49 from 60:40. The first move is against the fundamental objective of the Act – to provide livelihood security to rural households through guaranteed wage employment opportunities – which would deprive the poorest households from benefiting through NREGA in relatively rich pockets of the country. Given past experience, the move to alter the labour-material ratio is most likely to open up enough space for corruption, only to serve private contractors and local mafia through supply of materials in the name of creating durable productive assets.

Instead of bringing these radical amendments which will lead to the gradual death of NREGA, the government needs to establish a robust mechanism to strengthen the existing systems within the bureaucratic set-up at the state, district, and block levels to improve efficiency of programme implementation to realise the true potential of NREGA and other such programmes. The prime minister himself has stressed on this need several times, and has demonstrated improved bureaucratic efficiency during his tenure as chief minister of Gujarat.