The Hindu : Opinion / Editorials : GOING BACK ON A BIG PROMISE

Online edition of India's National Newspaper
Monday, Sep 13, 2004

Opinion

Opinion - Editorials

GOING BACK ON A BIG PROMISE

THE PLANNING COMMISSION'S allocation of Rs.2,020 crores for launching a food-for-work programme in 150 districts marks the first, even if hesitant, step in the implementation of a crucial component of the National Common Minimum Programme (NCMP) of the United Progressive Alliance (UPA). Although the necessity of such a programme has been obvious for several years, it has never been seriously taken up on a countrywide basis. The advantage of a comprehensive food-for-work programme is that it can generate employment in the countryside while putting the large amount of foodgrain stocks with the Government to productive use. This is particularly significant in the context of the widespread agrarian distress that is, among other things, expressed in the shrinking opportunities for employment in rural India in the past decade. The food-for-work programme can result in capital formation and stimulate demand on an economy-wide basis. Rural infrastructure for education, health and child care, and roads and irrigation works can be put in place. If implemented by panchayati raj institutions under a vigilant cost-monitoring regime, the programme can ensure that appropriate rural assets are created.

The UPA, correctly understanding the message sent out by hundreds of millions of voters in the 14th general election, placed the promise of enacting a National Employment Guarantee Act at the top of its agenda. In specific terms, the NCMP promised to work towards providing a statutory guarantee of at least 100 days of work in the year at minimum wages to one able-bodied member of every rural family. Seen in the background of the promise and the context of widespread agrarian distress, the allocation of Rs.2,020 crores appears grossly inadequate. It is important to recall that the budgetary allocation for rural employment schemes in 2004-05 was scaled down to Rs.4,590 crores from the Revised Estimate of Rs.9,650 crores in 2003-04. The hope that the Planning Commission would compensate for this steep decline has been belied. But then it was severely constrained because 12 priority sectors competed for the limited corpus of Rs.12,000 crores placed at its disposal. The Commission, in its Approach Paper to the Mid-Term Appraisal of the Tenth Five-Year Plan, has estimated the cost of the Employment Guarantee Scheme at between Rs.20,000 crores and Rs.40,000 crores. It has raised doubts about whether "necessary resources can be provided" for the scheme. The pronouncements of the Commission over the last few days thus strike a blow at a crucial pillar of the NCMP. They demolish hope that the food-for-work programme can graduate into a full-blown scheme guaranteeing employment. The cost may appear high in absolute terms, but it is only a fraction of India's national income — less than 2 per cent, in fact.

There are fears that schemes such as the food-for-work programme may get slotted out of the Government's list of priorities on account of the Fiscal Responsibility and Budgetary Management Act, which sets limits on public expenditure, binding the Government to pre-set fiscal deficit targets. One serious problem is that while the Act imposes `discipline' on the Government in terms of its expenditures, it prescribes no accountability for revenues lost through forgone taxes or concessions offered to various special interests (the most notable being the recent virtually coerced dilution of the provisions of the Securities Transactions Tax). While Prime Minister Manmohan Singh may claim his Government has few real options, the present indications are that it is in the process of reneging on a solemn commitment it made to the people of India — because it has straitjacketed itself.

Printer friendly page
Send this article to Friends by E-Mail

Opinion