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By I M Shah How can the drought-hit state of Rajasthan manage a scheme that will guarantee every poor household 100 days of employment a year? How can it finance this scheme costing Rs 1,600 crore per year? The Mazdoor Kisaan Shakti Sangathan has some answers
Four successive years of drought in the desert state of Rajasthan have snatched from the rural populace their sources of livelihood as well as their right to live with dignity. Despite a good monsoon this year, the impact of years of scarcity on the rural economy has been phenomenal. The people of Rajasthan are looking to the Congress(I)-led government to provide them employment opportunities at a time when the state is going to the polls. But, since the onus is on the state government and its employment policies and programmes (these would necessarily have a medium or long-term time-frame), no immediate solution is in sight. The Mazdoor Kisaan Shakti Sangathan (MKSS) -- which successfully took up the right to information issue under the leadership of Magsaysay award winner and social activist Aruna Roy -- has now launched a campaign for the introduction of a Maharashtra-style Employment Guarantee Scheme, backed by appropriate legislation, and the creation of dedicated sources of financing in Rajasthan. The organisation has raised the matter at various levels, held public demonstrations and tried to build public opinion in its favour. Since the scheme will initially have to be self-financed, for a quick introduction, the MKSS has called for a launch in select districts or blocks. This was identified as an area for priority action at a crucial meeting of the Congress chief ministers' council in Srinagar during the first week of June 2003, even though no significant follow-up action was taken in any Congress-led state. The pressure put by the MKSS and other civil rights organisations on the Rajasthan government has persuaded it to initiate the process of formulating the scheme. By an order issued recently, the government has appointed a seven-member committee, headed by the additional chief secretary (finance), to lay down the implementation process and calculate the costs involved. However, Roy points out that this being only an administrative order, a notification with a specific timeframe should have been issued. The employment guarantee law, if enacted, will entitle any person who does not get work within 15 days of applying for it to receive an unemployment allowance from the government at a rate not lower than one-fourth of the statutory minimum wage. The implementation of employment guarantee works will follow the same basic procedure as those presently applicable to drought relief and other rural work programmes. The MKSS, in association with members of the Right to Food Campaign, has prepared a draft Employment Guarantee Act for Rajasthan, drawing inspiration from a similar law that has been in force in Maharashtra since 1977. At the same time, it attempts to consolidate recent trends towards decentralised planning and devolution of powers in the state. It envisages the gram panchayat, rather than the panchayat samiti, as the main implementing agency at the village level. The proposed Act also includes stronger mechanisms for transparency and accountability at all levels. For instance, gram sabhas are expected to conduct social audits of the projects taken up within their jurisdiction, every six months. The annual cost of a full-fledged Employment Guarantee Scheme for the state is estimated at Rs 1,600 crore, at 2001 prices. This is about 2% of Rajasthan's domestic product. If the central government extends its help, this cost can be reduced by half. The wage rate is assumed to be Rs 60 per day, which is the statutory minimum wage in the state; the labour-material ratio is assumed to be 75:25. This means that each day of employment generation will cost the government Rs 80 per day. According to MKSS estimates, employment generation under the proposed scheme will be in the order of 20 crore person-days per year. This roughly corresponds to 100 days of employment per Below the Poverty Line (BPL) household in a year. This should enable most poor households to cross the poverty line, though separate social security arrangements will be required for those who are unable to work. In order to contain employment generation within the target of 20 crore person-days per year, it may be necessary to apply a cap on the total number of days of employment each person or household is entitled to receive in a year. This is not inconsistent with the notion of employment guarantee, and the draft Act leaves room for such a ceiling. As regards implementation, if the employment guarantee programme is initially restricted to half the districts in Rajasthan, the initial cost will amount to Rs 800 crore per year. Of this, roughly Rs 300 crore can be absorbed under the Sampoorna Grameen Rozgar Yojana (SGRY) and other related schemes. This leaves a short-term burden of Rs 500 crore per year in the initial phase, which could be raised through a temporary 20% surcharge on sales tax. (An earlier 15% surcharge on sales tax following the abolition of octroi in Rajasthan fetched Rs 375 crore.) The MKSS has suggested that the programme's extension from half the districts to all districts, hopefully from the second year onwards, should be conditional on the central government agreeing to pay half the total programme cost. The state government will contribute the other half, ie Rs 800 crore per year. This can be made available by raising taxes and/or reducing low-priority subsidies. The options include additional liquor tax, professional tax, ‘green' taxes on vehicles, mining and advertisements, increases in tax on property and capital transactions, improved efficiency in revenue collection, and holding government salaries and pensions constant, in real terms, for a year. If needed, the initial costs could be reduced by restricting the scheme in the first year to one-third or one-fourth of the districts, instead of one-half. As Roy points out, the main issue from the point of view of the right to work is to provide for a legal and universal guarantee of employment within a reasonable timeframe. The costs could later be met through an employment guarantee fund established for the purpose. Ideally, the resources for this fund will come from three sources -- first, a bundle of ‘dedicated taxes', second, a matching contribution from the state government, and third, a matching contribution from the central government. Gram panchayats, panchayat samitis and zilla parishads will receive fixed shares of the project funds (initially 74%, 15% and 11% of total project funds, respectively). The employment guarantee fund is also expected to be used to disburse unemployment allowances, pay the salaries of support staff, and pay compensation in the event of disability or death etc. The draft Act provides for every implementing agency to be accountable to an independent monitoring body. At the state level, there will be an employment guarantee council that will be answerable to the state assembly. With assembly elections around the corner, it is unlikely that the campaign will produce any quick results. It remains to be seen how long it takes for the next elected government to realise the significance of employment guarantee as a concept that can alleviate the sufferings of lakhs of drought-affected people in Rajasthan. (I M Shah is a Jaipur-based journalist) InfoChange News & Features, November 2003
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