Flagship schemes for poor are falling apart. Will Cong learn?

The Congress’s brand of inclusive development is under fire again.

Two media reports over the weekend have drilled holes into two of its pet social sector schemes-Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) and the farm loan waiver of 2008-that purportedly made the party a darling among the rural poor.

According to a report in The Times of India on Sunday, over three years from 2009-10, total work generated under MGNREGS witnessed about 25 percent decline from 284 crore person-days to 211 crore person-days.

Further, Dalit households witnessed a 46 percent decline in work days by a staggering 46 percent over the same period, from about 86 crore to 47 crore person-days. Meanwhile, for adivasis the decline was 35 percent, from 59 crore to 38 crore person-days, the report said.

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The MGNREGS is being criticised by a section of economists and experts for various reasons, the important among them being that it is resulting in a spiral of wage inflation in the rural area and distorting the labour market there.

The farm loan waiver of 2008, the scheme which is widely accredited with helping the United Progressive Alliance return to power, has come under attack from none other than the Comptroller and Auditor General (CAG), says a report in Outlook magazine.

[caption id=“attachment_612871” align=“alignleft” width=“380”] One of the fallouts of the scheme was that those farmers who did not default on the repayment were disappointed as they felt the scheme was an incentive for defaulting.[/caption]

According to the report, which is a follow-up of an item that was shown on Headlines Today channel, a CAG audit of 1,00,000 cases in 800 bank branches has revealed that ineligible farmers and entities have benefitted from the scheme.

Towards this end, documents were tampered with. In some cases, banks even charged the farmers for the services and curiously, a few microfinance institutions have got the relief.

For beginners, the farm loan waiver scheme was aimed to write off farmers’ loans worth about Rs 52,000 crore. Those eligible were small and marginal farmers holding up to 5 acres of agriculture land and loans up to Rs 50,000. As many as 3.45 crore farmers were to benefit from the waiver.

The scheme had attracted criticism from various quarters. A section of the economists had seen this as fiscal profligacy by the UPA with dangerous consequences.

One of the fallouts of the scheme was that those farmers who did not default on the repayment were disappointed as they felt the scheme was an incentive for defaulting.

While the report on the MGNREGS was an analysis of the data, the one on the farm loan waiver was from a CAG report.

The final CAG report is to be placed before Parliament during the budget session.

What went wrong

Coming at a time when the country is headed towards an election year, these reports should serve as an eye opener for the ruling alliance, especially since the Congress has no intention of scaling down its spend on such schemes.

It is clear that most of the criticism against both the schemes have turned out to be true. In most cases, benefits are not reaching the intended beneficiaries and are being pocketed by the middle men.

In the case of MGNREGS, lack of political will to implement the scheme in letter and spirit was evident from the beginning.

The scheme, if implemented as envisaged in the Act, would have resulted in devolution of power, which to a large extent could have helped plug the leaks.

According to the ToI report, Pramathesh Ambasta of the NREGA Consortium, an advocacy group, is of the opinion that one of the reasons for the decline in persondays “is lack of awareness that MGNREGS work is a right rather than something the system will provide”.

There is also a shortage of dedicated staff at the gram panchayat level delaying the planning and payments.

The report citing government data says payments to about 27 percent of the workers were delayed by up to 30 days. The poor cannot afford to wait for these many days as they are would not have any buffer funds, the ToI report said.

According to Union civil aviation minister Ajit Singh of Rashtriya Lok Dal, quoted in the Outlook report, a key reason for the shoddy implementation of such schemes is that they are central government schemes and are implemented by state governments without “any monitoring system or authorities to maintain checks and balances and follow-up the implementation”.

The problem only compounds when the state government is run by parties that are nationally opposing the Congress or the UPA.

It is significant that these news reports have come at a time when the government is preparing its budget for the next year and also for the general elections in 2014.

The Congress is projecting direct cash transfer as its next big move that takes its inclusive development theme forward. But here too critics have warned of likely leakages, which may result in the benefits not reaching the intended beneficiaries.

It would be better if it does a little introspection and identifies the big holes in the system.