Rural Employment Programmes: Elusive Illusion

The term 'business', when viewed in a wide perspective, concerns not only the affairs of private entrepreneurs and public-sector undertakings and the Government's policies affecting them, but also the Government's own efforts for improving the economic well-being of the people. That's why the problems of the public distribution system came within the scope of this column.

Now let us do an auditscan of the rural employment schemes organised by the Central Government on a national scale and implemented by all the States and Union Territories. The source of our information is a recent performance review made by the Comptroller and Auditor General of India (CAG).

Pastoral Setting

Since the economic benefits flowing from successive five-year plans were not percolating equitably to the rural poor, the Government of India introduced the Food for Work programme in 1977. Later on, this was replaced by two wage-employment schemes called National Rural Employment Programme (NREP) and Rural Landless Employment Guarantee Programme (RLEGP), which were merged in 1989 and given a new name: Jawahar Rozgar Yojana.

The main objective of JRY was to generate some employment for people living below the poverty line (BPL) in rural areas--especially those belonging to scheduled castes and tribes -by undertaking productive and labour-intensive works there. The wages would be paid partly in cash and partly as foodgrains, and women were to be provided 30 % of the benefits.

Another project called Employment Assurance Scheme (EAS) was introduced in selected areas in 1993, and was extended to all rural districts in the country in 1997. This has the specific aim of giving at least 100 days' work to two adults in every BPL family during the lean agricultural season.

The twin schemes have the parallel objective of creating some durable economic infrastructure and common assets in rural areas. The works envisaged are social forestry, horticulture, irrigation (wells, dams, field channels), afforestation, soil and water conservation measures, pastures, vegetative hedges, rural link roads, school buildings, community hills, etc.

In both schemes the wage component is to be not less than 60 % of the expenditure, which is shared by the Central and State Governments in the ratio 4:1. The funds are distributed to the village Panchayats through the district officials, who are responsible for planning, coordination, and supervision.

Magnified Expenditure

During the 8th plan period (1992-97) and upto 1998-99, Central and State funds released for JRY and EAS amounted to Rs 34,500 crore. And according to the reports sent by the State/UT Governments to the Ministry of Rural Development, the total expenditure was Rs 33,400 crore. On the face of it, such nearly-full utilisation of available funds is impressive. But the true story, as told by the CAG, is quite different.

The sample audit checks in the field had covered Rs 9,400 crore, or 28 per cent of the amounts said to have been spent. Out of this, it was found that Rs. 3,250 crore was not actually used for the intended purpose. It was deposited in personal ledger or bank accounts (Rs 1,750 crore), or otherwise lying unutilised (Rs 750 crore); diverted to activities having nothing to do with these programmes (Rs 430 crore); or spent for wrong reasons, misappropriated etc. (Rs 320 crore). That left less than Rs. 6,200 crore for legitimate works.

The samples selected for audit were substantial, and were spread all over the country. They show in many states a very heavy chunk of the reported 'expenditure' was not actually spent for generating employment.

More Revelations

There were also other serious deficiencies in implementing the schemes. Registration of workers under EAS was not done properly in many places, and prescribed 'family cards' were not always issued to those registered. There were many instances of unregistered and even non-BPL persons being employed.

The wage component was sometimes less than the specified 60 per cent of the expenditure. The wages paid were sometimes less than the minimum daily wage. Contractors were often engaged in violation of the regulations, their margins eating into the money available for wages.

Proper muster rolls clearly recording details of labour engaged were not maintained in most places. There were no systematic inventories of assets created, and assets were not always handed over to the local officials for maintenance. There were also instances of assets being created on private lands belonging to rich farmers.

The local officials were not normally preparing annual plans and 'shelves' of projects, as required. Planning, coordination and supervi8ion were very slack almost everywhere. Audit found strong evidence that the elaborate monitoring mechanism, which exists at the State and national level, was ineffective.

Marginal Employment

As regards the actual results in terms of rural employment generated, there were no reliable records in the field for making a true assessment. In the universal absence of authentic evidence like well maintained muster rolls and inventories of as6ets, the State/UT Governments arrived at the annual employment figures simply by dividing the prescribed wage element (60 per cent) of the reported expenditure by the prevailing minimum daily wage.

And even such figures were remarkably low. In the case of JRY, the funding was slashed very heavily from 1996 onwards. The rural BPL population was estimated to be 244 million, which roughly meant about 49 million families. Vis-a-vis such a formidable target (there being no selective approach), the average employment generated by JRY during the four years 1992-96 was only 17/21/20/18 man-days per family; and it fell to 8/8/7 man-days in the next three years.

As regards EAS, the expenditure rose steadily from 1994-95 to 1998-99. But the number of registered workers shot up even more steeply (from 15 million to 43 million). Consequently, the average working days per registered person, which were only 18 to start with in 1994-95, fell to 17/15/11/9 in the next four years.

Mind you, these were not actual figures, but theoretical calculations based on the reported expenditure. And since the expenditure was highly exaggerated, to that extent the employment figures derived from them must als0 be discounted.

Moreover, the audit report points out that with the given degree of funding, even the maximum average employment that could have been generated in ideal conditions in 1998-99 was only nine days under JRY and 10 days under EAS. This was a far cry from the RAS promise of 100 days' work to each registered worker every year, even if the two schemes overlapped and some people might have got the benefits from both.

Illusion

It is depressing to think of so much money being spent for achieving such trivial results. But the Central and State Governments have been jogging along with these programmes almost unmindful of the extremely feeble impact being made on rural unemployment and poverty, although audit had alerted them forcefully in two sets of reviews submitted to Parliament and all State legislature in 1995 and 1997.

Perhaps they are shell-shocked by the realisation that the roots of the colossal mess go much deeper than even the serious deficiencies and distortions in implementing the scheme. The glaring mismatch between the declared objective and the available resources (however massive) is an inevitable result of the mind-boggling number of intended beneficiaries. As we had noted earlier (AUDITSCAN, March 6), this is a generic problem which haunts all nation-tide welfare and development schemes.

Obviously one cannot expect the Government of India to give up these on-going programmes which have become a familiar feature of the rural environment all over the country. But the least that must be done now is to make the implementation in the field far more efficient, and improve the supervision and monitoring at all levels.

Also, the Government must seriously consider merging the two schemes running in tandem on the same track. A glance at the trend of allocations shows that from 1996-97 onwards the Employment Assurance Scheme was being financed mainly by slashing the JRY funding correspondingly. This really makes no sense at all, unless one can find a political motive for trumpeting the high-sounding 'assurance' of 100 days' work to millions of unemployed villagers.