India's "Republic of Work" fails rural poor

SHEIKHPUR, India (Reuters) - A dozen men shovel soil into baskets, carry them a few yards and dump the earth at the head of a new dirt road snaking through a remote Indian village.

Labourers work under the National Rural Employment Guarantee Act (NREGA) to build a dirt road at Sheikhpur in India's poorest state of Bihar January 22, 2008. REUTERS/Desmond Boylan

It is hard to imagine the road lasting long during the annual monsoon rains and floods which batter this eastern region.

This is part of what the government proudly calls its “Republic of Work,” a flagship plan to provide 100 days of employment every year for tens of millions of rural poor, which is running into serious trouble two years after its launch.

Critics say much of the work carried out under the National Rural Employment Guarantee Act (NREGA) is pointless, much of the money stolen and the entire scheme misguided in a country plagued by fractious, weak and often corrupt governance.

Even its supporters say a radical overhaul is needed.

“On the one hand, political leaders parade the NREGA as one of the main achievements of this government,” the scheme’s architects Aruna Roy, Jean Dreze and Nikhil Dey wrote.

“On the other hand the government is doing far too little to face the organizational challenges involved in ensuring that the Act achieves its potential.”

Here in India’s poorest state, Bihar, where the need to stem mass migration to cities is most pressing, Reuters found the scheme to be virtually non-existent, condemned by aid agency ActionAid as a “gross failure.”

Elsewhere, the plan to guarantee labor to one member of each poor family has been more successful, but is still barely scratching the surface, aid workers and analysts say.

India’s most ambitious effort ever to tackle rural poverty, the scheme was described as “historic and revolutionary” by Prime Minister Manmohan Singh when launched across a third of the country on Feb 2. 2006.

It is central to efforts to spread the benefits of India’s booming economy to its innumerable poor, and address the yawning inequality which threatens the very foundations of that boom.

It may also be crucial for the ruling Congress party when national elections are held by mid-2008.

Two years on, the government calls the scheme a “tremendous success” -- typical, says Belgian-born development economist Dreze, of its “ostrich-like behavior.”

An audit by an autonomous government office leaked last month found “significant deficiencies,” including a lack of trained manpower, little transparency or monitoring, and corruption.

Just three percent of registered households audited received 100 days of employment. The average was just 18 days.

On April 1, the government will expand the scheme to cover the entire country, something Dreze describes as “one of the biggest organizational challenges any government has ever faced.”

The audit should have been a “useful wake-up call” -- if anyone was listening. “Let it not be said, a few years from now, that this extension took place appropriately on April Fool’s Day,” Roy, Dreze and Dey wrote.


Others are less forgiving.

The Centre for Environment and Food Security, an independent think tank, said a survey of 100 villages in impoverished eastern Orissa state showed about 75 percent of funds had been “siphoned and pocketed by government officials” in an organized way.

Inflated records and forged documents allowed bureaucrats to claim money for work that had simply not been done and for employment that had never been granted, it said.

“Only leakages and crumbs have reached the rural poor of Orissa,” it concluded. “This scheme has become less of employment guarantee scheme for the hungry and poor and more of a money spinning machine ... for Orissa’s sarkari babus (bureaucrats).”

The report’s author, Parshuram Rai, said a just concluded study in Madhya Pradesh had reached similar conclusions, with between 55 and 75 percent of funds missing.

When a Reuters team traveled to Bihar, it was hard to find any work taking place at all. Officials in Musahari subdistrict, home to more than a quarter of a million people, said just 20 small projects were under way.

Their most impressive showcase, the dirt or “kutcha” road in Sheikhpur village, employing, at most, 16 people.

Rajesh Kumar Chaudhry was put in charge of the scheme in Musahari two months ago and was doing his best to put people to work. But the program’s design was not making it easy.

Sixty percent of the money has to be spent on unskilled labor, leaving precious little for skilled labor or materials. That meant “pukka” roads or buildings like schools or clinics were pretty much out of the question, he said.

“We can only use soil, not plaster or cement. This district is flood prone, and it would be good to build a raised platform for people during the flood period, but that needs a lot of soil -- and that is not available here.”

Workers were hard to find, he said, with wages of just 81 rupees ($2) a day little attraction. “Work in godowns (warehouses) and construction work pays them more,” he said.

Bureaucrats across the country don’t always have the expertise or local knowledge needed to design relevant projects. In Haryana state, the audit says, hundreds of ponds were dug which do not collect or retain water.

Manoj Rai of research and development organization PRIA said his survey showed bureaucrats asked for bribes to approve work done under the scheme or release funds needed to pay wages.

“We were joking that if you need a billion rupees for implementation, you need 30 percent for bribes,” he said.

Dreze says it has been much more of a success in states with better governance, including Rajasthan and Andhra Pradesh, and is finally taking off in vast, densely populated Uttar Pradesh.

The publication of “muster rolls” in villages and on the internet discourages false reporting. Dreze says the scheme needs to be tightened up rather than abandoned, a view shared by many who work in rural India, including PRIA’s Rai.

“If six percent of Indians are getting 100 days of work, this is a very big thing to happen,” he said. “But the money available for this scheme is so great, it can provide work for 60 percent not six.”

Editing by Mark Williams