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The Employment Guarantee Loot

Omkar Goswami


Milka Casanegra, the former chief of tax administration at the International Monetary Fund had a famous aphorism: “Tax policy is tax administration”. It basically means that you can design whatever policy you want, but if you don’t have a proper administrative framework, it will surely come to nought. Ms. Casanegra would have much to say about our soon to be implemented Rs.40,000 crore Rural Employment Guarantee scheme — all of which uncomplimentary. Let me explain why.


Located on the left bank of the river Sone, Jehanabad in Bihar surely ranks among the worst 50 rural districts in the country. According to the 2001 Census, 66 per cent of its 221,000-odd households lived in kutcha houses; and only 1.5 per cent of the households could boast of an electricity connection which, knowing Bihar’s administration, probably didn’t have electricity for more than two hours a day. It is a desperately poor district with no roads or infrastructure worth the name; schools exist merely on paper; medical facilities are non-existent. It is also prone to vicious caste violence. On a night of  December 1997, Ranvir Sena thugs rowed across the river and massacred over 70 dalits — men, women and children alike — in a tiny hamlet called Laxmanpur Bathe. If there is a district crying out for sustained succour, it must be Jehanabad. And there are many other such districts in Bihar: Araria, Gaya, Katihar, Kishanganj, Madhepura, Purnea, Sheohar, Supaul, to name a few.


This is where Ms. Casanegra’s adage comes in. There is absolutely nothing in our administrative system which can ensure that funds allocated for creating employment in  Jehanabad can flow directly from Delhi to the district. It has to be routed through Patna. Given the state of political and economic governance in Bihar and the venality of its politicians and civil servants, if Rs.100 crore were earmarked for Jehanabad, how much do you think would actually go to that godforsaken district? At the very best, it won’t exceed Rs.15 crore. And after the local MPs and MLAs get their share of the booty, rural employment would be left with probably less than Rs.10 crore. If that.


What is true for Jehanabad holds in large measure for Jharkhand, central Madhya Pradesh, Chhattisgarh, Orissa, parts of central and southern UP, northern Karnataka, swathes of Assam and the north-east, the tribal districts of Gujarat, and large tracts of western Rajasthan. There is simply no administrative system worth the name to ensure that the funds allocated for the worse off districts actually flow in substantive measure to the district headquarters, or that the little which gets there is in fact used for rural employment generation.


According to the government and its many honorary advisers, this is where the Indian NGOs will jump into action. This phalanx of dedicated activists will fan the length and breadth of the country to monitor the actual implementation of the programme and be its conscience keepers and whistle blowers. So, we will see tens of thousands of dedicated NGOs supervising every project and every paisa of Rs.40,000 crore spent each year on the scheme, and blowing the whistle on every corrupt politician who comes in the way. And,  fearing exposure and retribution, the tribe of crooked netas and babus will be ensure that the money is well spent. A great vision. How I wish it were true!


I won’t be at all surprised if every MP votes for this scheme. It is, after all, legally sanctified loot. Rarely in the history of a nation can one get an assured kitty of Rs.40,000 to play around with, year after year. It is a great deal for everyone. It makes the government look socially concerned; it gives the politicians a handy bag of money; and it gives the NGOs their place in the sun. For all these wonderful things, it is a small matter that the exchequer may go bust. And that it will do precious little for the hapless households of Jehanabad.


That’s why, as Ms. Casanegra would say, “Policy is nothing without administration”. And why the rural employment guarantee scheme will be nothing but legislatively sanctified loot. 


Published: Business Standard, September 2005


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