Volume 6, No. 3, March 2005


Fraud of the Employment Guarantee Scheme



The Congress is an expert at duplicity from the very days of its inception over a century back. It pretended to be anti-British, only to act as a tool of the British as a safety valve to diffuse the discontent. In AP it clamours about talks with the Naxalites and then shoots them down in cold blood. Now it talks of "Employment Guarantee" only to bring a Bill which does exactly the opposite, which is just a pretense of fulfilling its obligation in the Common Minimum Programme (CMP).

The CMP had said "the UPA government will immediately enact a National Employment Guarantee Act. This will provide a legal guarantee for at least 100 days of employment to begin with on asset-creating public works programmes every year at minimum wages for at least one able-bodied person in every rural, urban poor and lower middle-class household."

With this purported aim, what has the Congress government now introduced, to be passed as an act later this month in the Budget session of Parliament? The National Rural Empl-oyment Guarantee Bill 2004 was tabled in Parliament on Dec. 21, 2004.

Firstly, as mentioned in the CMP, there is in this Bill no universality for all the unemployed. It is highly arbitrary and will be applied only in those areas that are time to time notified by the government. In other words it may be applied in just one or two places in the whole of India and there is no necessity to make it applicable throughout India. This very clause can reduce this Act to a mere scrap of paper, which will more likely be the case given that the CPM-backed Congress government is speedily implementing the entire neo-liberal policies of the imperialists, which is totally against such expenditures.

Next, this Bill says that it will only be available for the extremely poor; i.e. those with a BPL card. Now, everyone knows that the BPL is a major fraud to dupe the masses from taking rations at a lower rate. For example in the largest slum in Asia, Dharavi, Mumbai, there are just 151 BPL cards. So, in other words even if implemented it can restrict its use to a handful of people.

Thirdly, the wages to be paid under this EGS scheme will be arbitrarily decided by the government and the minimum wages will not be applicable. At present all other employment schemes are being paid (at least officially) at the minimum wages rate. For example, the Food For Work Programme and the SGRY (Sampoorna Grameen Rozgar Yojana) entail payment at the rate of the minimum wages fixed. In other words it will pay a pittance for labour used for their projects.

Fourthly, though the entire scheme was to be centrally funded, the present Bill seeks to shift the burden on the State governments, who anyway have no funds as most are bankrupt. It says the wage component will be paid by the Central government while the material cost and the expenses of running it will have to be born by the State governments. What with the government centralizing tax revenue even further, through VAT and other schemes, the States will be left with even less funds for such schemes. In that case they are never likely to get off the ground and the Centre will calmly absolve itself of its responsibilities.

Finally, and worst of all, is the fact that the Bill proposes that all other employment generating schemes, at both the Central and State levels, wind up and merge into this new half-baked scheme. In other words all existing schemes will close down; and those that are universally applicable will now become targeted towards only the BPL; and those that are being paid at the minimum wage rate will now be paid at the arbitrary rates fixed by the government. This will finally achieve the virtual disbanding of employment schemes and what remains will be the use of virtual slave labour for government projects!!!! This is exactly what the World Bank and IMF have been demanding for years but the governments have not been able to implement for fear of peoples’ hostility to it. Overall, with this clause, the total spent on employment generating schemes, which have been coming down over the years, will now get drastically reduced.

The neo-liberal regime in India is out to push the masses deeper and deeper into poverty using various types of smokescreens, as with the present EGS. Already in India, according to Utsa Patnaik ("The Republic of Hunger", Social Scientist, Sept-Oct 2004), if poverty in India is defined with respect of a calorie norm of 2,400 calories per capita per day in rural areas; then 75% of the rural population is "poor" as compared to 56% in 1973-74. To implement a universal EGS as proposed, it would entail an expenditure of just 1% of the GDP. But, on the contrary the government is raising a hue and cry about the so-called massive subsidies and has infact introduced a report to reduce them even further. Not a word is mentioned of raising resources from increasing taxes which have been cut drastically — particularly for the rich and big business. Meeting the deficit need not be met by merely cutting subsidies to the poor; it can also be met by raising taxes of therich. Today the Centre’s tax-GDP ratio is one of the lowest in the world and is going down continuously. In fact if the government was to raise the tax-GDP ratio to levels of what they were in 1990/91 they would be raising an additional Rs.30,000 annually which could cover many a welfare scheme. But this Rs.30,000 is an annual gift to the money-bags, who it does not want to touch.

The people of the country must vehemently oppose this new EGS scheme and demand universal employment guarantee at a living wage.





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