August 24, 2005
 

Misrepresented numbers in National Rural Employment Guarantee Bill?

Somehow the UPA Government's numbers on the National Rural Employment Guarantee Bill, passed yesterday in the Lok Sabha, do not quite add up. Sonia Gandhi mentioned in Parliament a couple of days ago that an economy growing at 7% can find the resources for the project, 40,000 crore annually.

Two hundred out of 600 rural districts in the country will be targetted in the first year. India's population is currently 108 crores. Let us assume that one in every four people will be provided 100 days of employment at Rs. 60 per day (minimum). Arithmetic to work out the cost is 200/600 x 1/4 x 108 (cr) x 60 x 100 = 54,000 crores, 35% more than what the government claims it will cost. Even assuming that one in five individuals get to be part of the scheme, it works out to 43,200 crores, 8% more than the government's numbers. The above calculations implicitly assume that the bulk of the people in the rural districts will be eligible. I'm fairly sure that the percentage of rich rural farmers/land-owners is very low compared to the overall rural population.

It is a massive programme, on a scale unheard of and almost certainly never attempted before anywhere else. The government really does need to ensure that under the garb of employing rural poor, politicians' relatives do not get preferential treatment. The other issue I've been wondering about is who will employ all these people. The government? Or will it expect the private sector to pitch in as well? What will these people be used for? Infrastructure development related projects such as road/rail laying, electricity/telecommunications poles laying & digging, water pipelines laying etc.? What safeguards will they have to prevent their employers from reneging on the minimum wage payment? Besides, Rs. 6000 a year is half the country's per-capita income!

Labels: sonia gandhi