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Friday, Jan 21, 2005

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Opinion - Leader Page Articles

The case for employment guarantee

By Rajeev Dhavan

If the schemes are illusory, the National Employment Guarantee will end up being neither national, nor providing sufficient employment, nor being a guarantee.

ON SEPTEMBER 5, 1949, Babasaheb Ambedkar warned the Constituent Assembly that on January 26, 1950, India was going to enter into a "life of contradictions." The Constitution guaranteed political as well as social and economic equality. Ambedkar asked: "How long shall we continue to deny equality in social and economic life? If we continue to deny it for long, we shall do so by putting our political democracy in peril. We must remove this contradiction at the earliest ... lest those who suffer from inequality will blow up the political structure which this Assembly has so laboriously built up." Nobody paid heed to this warning.

Apart from the equality clauses (Article 14), the Constitution injuncted forced labour and exploitation (Articles 23 and 24). But positive assurances were put into the wish fulfilment list of the Directive Principles to include the objectives of social justice, the right to livelihood and a living wage (Articles 38, 39 and 43). Later, ameliorative legislation was made for the `employed' in terms of minimum wages, pensions, provident funds and wage revisions. But for the `unemployed,' there was nothing other than their daily heroic struggle for survival.

Two important circumstances caught up with this unforgivable neglect. The lesser circumstance was the Supreme Court's decision in Olga Tellis' case (1985) treating the right to livelihood as an enforceable — albeit hedged in — fundamental right. The more important circumstance was the demand from political democracy. The unemployed poor had a valuable vote, including more than 150 million ever increasing voters. This vote converted a constitutional objective into a political demand. The voiceless had a voice. The voice could not be ignored.

After the 2004 Lok Sabha elections, there was little doubt that the votes of the poor determine which government should be elected to power. To ignore this vote-bank is to ignore political democracy and risk forfeiting a political party's future.

The question was: having done everything for the `wage' sector, what did the Government promise to the unemployed rural sector? Nothing, something or a national guarantee? The record of successive governments was to provide a little something in the shape of various yojanas (programmes) such as the Annual Action Plan or Perspective Plan for the Sampoorna Grameen Yojana (SGRY) or the National Food For Work Programme (NFFWP). The Supreme Court has made it clear that continuous employment in Jawahar Yojana and other schemes did not entitle a person to regular employment. These schemes dispensed unpredictable palliatives, which rotated benefits available only as long as funds were available. But there was no guarantee.

What supposedly made the National Employment Guarantee (NEG) scheme different was that, at last, the Government was talking of a national guarantee. Since it is the poor that edged the United Progressive Alliance Government to victory, this constitutional gift was promised as a living reality. The original draft of the advisory committee was diluted in the National Rural Employment Guarantee Bill 2004 introduced in the Lok Sabha. In our view, the NEG has diluted the very concept of a firm guarantee for the unemployed rural poor.

The NEG Bill converts a guarantee scheme into a discretionary programme similar to its non-statutory predecessors. To begin with, the Act will commence when the Central Government may implement it in "different States and different areas" (Clause 1(3)). We know from A.K. Roy's case (1981) that the courts cannot mandate that an Act with such a clause should be brought into effect. After Roy's case, even a post-Emergency constitutional amendment to preventive detention in 1979 has not been brought into effect till now — 2005!

The NEG Bill must come into effect immediately — even if programmes may be staggered on the basis of a statutory scheme. This may require a new Clause 4A. Secondly, the minimum wage under the Minimum Wages Act should be the floor wage. In the Asiad Construction case (1982), the Supreme Court clearly laid down that anything short of the minimum would be exploitative and forced labour within the meaning of Articles 23 and 24 of the Constitution. The NEG Bill wholly ignores this — as did earlier programmes (Clause 6). To talk of wages less than minimum wages is irresponsible and wrong. Such a wage fixation will affect other provisions of the Act. The Bill lays down that after 15 days, unemployment allowance may be given in lieu of employment being unavailable (Clause 7). Where the economic capacity of the State prevents it, the unemployment allowance will be one-fourth of the (possibly less than) minimum wage for 30 days and one-half for the rest of the year until the 100 days target is met. Who can possibly survive on less than a minimum wage or a fraction of it? Clearly the NEG Bill must stick to the minimum wage as a floor guarantee. Even the promise of this unemployment allowance is illusory (Clause 8). If it is not paid, all that will happen is that a note will be made of it!

Thirdly, the benefit of the guarantee will be given to the wider concept of `household' potentially consisting of several families related by blood who share a residence, ration card or kitchen (Clause 2(f)). This definition runs through and undermines the benefit offered. Can several families of a household live off one family member's less-than-minimum wage? The Bill seems to think so because as soon as any one member of this wider household gets a job, the unemployment benefit for the others will stop (Clause 7). If the purpose of the Bill is to provide a guarantee of livelihood, a `household' must be defined as a nuclear family. Otherwise, ensuring a livelihood will become impossible.

Fourthly, harsh penalties prescribe for forfeiting the unemployment allowance for three months for not turning up for work — even if there is good cause or because a corrupt Programme Officer may not grant permission to be absent (Clause 9).

Fifthly, the schemes for which work may be obtained are laid down and need to be re-examined (Schedule I). But all this may be altered by Clause 29, which lawyers call a Henry VIII clause because the Central Government may change the statute after simply informing Parliament. Henry VIII clauses are rightly characterised as `executive autocracy.' The First Schedule should be reworked and the Henry VIII Clause withdrawn.

Sixthly, assigning work projects to the panchayats should be mandatory and not left to the discretion of the State (Clause 16). Aruna Roy and others in Rajasthan have shown that panchayat control increases participation, transparency and accountability. Seventhly, the public finance provisions require elucidation. Normally, labour welfare statutes affect the States' budget only as an employer or by way of administrative costs. Under the Bill, the Union will pay the wages, some of the administrative costs, and three-fourth of the material cost (Clause 22). The States are a little perplexed. Significantly, unemployment allowance has to be met by the States. So if no work is available in an area, the States will have to bear the cost to the same extent as if the wage was paid (Clause 7).

The Bill fails to grasp the essentials of financial federalism, which require that where the Union wants to promote legislation requiring special costs, it has to pay for them — with the Chief Justice of India to arbitrate (Article 258 of the Constitution). This is a scheme that is crying out to be derailed through the lack of guaranteed funds. Financial federalism does not work on such principles.

Eighthly, the scheme has become so discretionary in its application that it will result in political patronage or very few schemes with even lesser guarantees. Both the Centre and the States will target marginal constituencies to convert an economic guarantee into a political game.

Where do we go next? The NEG scheme is a promise of guarantee to some 300-400 million people who are unemployed, destitute, without livelihood and with little prospect for themselves and their families. By diluting these schemes, the very concept of effective livelihood protection disappears. If the schemes become excessively selective and discretionary in terms of their content and areas of application, the concept of a guarantee is lost. These schemes will be no better than their executive predecessors. The Act should contain a strong Preamble, objects clause and provisions for incremental extension. If the schemes are illusory, the NEG will end up being neither national, nor providing sufficient employment, nor being a guarantee. National guarantees for the poor cost money, for which the poor agree to work on public projects at minimal wages. If designed properly, the NEG Bill will be a landmark. Otherwise, at the next election, the UPA Government will learn the consequences of making false promises to the voting poor.

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