Resist Dilution Of Employment Guarantee

Smita Gupta

THOUGH the common minimum programme (CMP) of the UPA government promised an immediate enactment of a legal employment guarantee of at least a hundred days per rural household in all parts of India, there has been a consistent dilution of the provisions of the proposed Employment Guarantee Act. The draft as it stands today is a mere formality and a farce that makes a mockery of the common minimum programme.

Now, the draft of the Employment Guarantee (EG) Act has taken final shape and the finance ministry and the Planning Commission are hoping to bulldoze this diluted anti-people, anti-woman and anti-state government Act through. They have designed an Act that is effectively a narrowly targeted scheme which can move from district to district at any wage for any duration, all at the whims and fancies of the central government. The main revisions in the final draft, their implications and alternative formulation are summarized below. From this it will be clear that the government has created a targeted scheme dependent fully on the whims and fancies of the central government, which places an unnecessary and unaffordable burden on state governments.

However, the larger ramifications of the Act are in a sense far more serious than the Act itself. This is because the conditions of employment under this Act will determine working conditions in all government employment in rural areas, since work provided under all other ongoing central and state schemes is likely to merge into the employment guarantee programme.  The draft of EG Act as it stands today will convert a bulk of the universally accessible rural employment programmes into targeted ones, and supersede the very notion of a statutory minimum wage. This will institutionalise a regime of targeted wage flexibility in most government employment programmes, something which has not yet succeeded in India despite the best efforts of the World Bank and other Bretton Woods institutions.

The Employment Guarantee Act must not become a smokescreen to push policies that make a mockery of employment guarantee itself while furthering the neo-liberal agenda of privatisation of public services through the erosion of state finances; wage flexibility; retreat of the state from all development activities that are not targeted; etc. There are very powerful forces at work that want an early passage of this farcical legislation in the hope that populist rhetoric will provide the fig leaf to their intent. The fight for an effective act must continue within and outside Parliament.

PROBLEMATIC PROPOSALS IN THE FINAL DRAFT

1. The Preamble has been reformulated to include the word poor before defining the households whose livelihoods are sought to be secured. “An Act to enhance livelihood security of the poor households in rural areas of the country by providing at least one hundred days of guaranteed wage employment to every household whose adult member volunteer to do unskilled manual work.”

This opens the door to targeting (Below Poverty Line) BPL households. Targeting has many problems. The identification of the poor is far from satisfactory, both in terms of the criteria and procedure. The problem of wrong exclusion is rampant and has far more serious consequences than wrong inclusion. The livelihoods of vast sections of the near poor too are extremely precarious and fragile. No matter what measure one uses of hunger or malnutrition, there is no doubt that Indian people suffer pervasive and persistent food insufficiency.

Recommendation: Both the employment guarantee and the payment of the unemployment allowance must remain universal and self-targeted, as per the CMP. 

2. Section 1(3) The centre has been empowered to notify the areas as well as the period for which the Act will remain in force in different states. “The Act shall come into force in those districts in a State on such date for such period as may by notified by the Central Government and different dates may be appointed for different districts of the States.  Provided that it shall come into force immediately in such areas and for such periods as may be notified and shall be extended to cover all the rural areas of India after evaluating the implementation of Act in the districts chosen.”

This effectively erodes ability of Employment Guarantee Act to operate as a legal right or guarantee for all rural households. It is a contradiction to guarantee employment through an Act while retaining the privilege of withdrawing it, any time! Linking geographical coverage to an evaluation of the programme again does the same thing.

Recommendation:  The Act must clearly state a time period of 5 years within which all rural areas of India will be notified and brought under coverage.

3. Section 9(8) Only those who are identified as BPL are entitled to the payment of the unemployment allowance. This effectively reduces the scheme to a targeted one. There is no penalty for not generating work to those outside the BPL list.

“If the applicant, who is from a poor rural household, is not provided with employment in the manner provided in sub-section (3), he or she shall be entitled to a daily unemployment allowance in accordance with provisions made in Section 11.”

Recommendation: Every person/household entitled to the employment guarantee must also be eligible for payment of the unemployment allowance, which must remain universal and self-targeted.

4. Section 8(3) iii Wages are no longer linked either to the statutory minimum wages or the central advisory minimum wage.

“Notwithstanding anything contained in the Minimum Wages Act, 1948, the Central Government may fix the rate at which wages shall be paid to the labourers employed under the Programme.  Provided that, different rates may be notified for different areas. Provided further that, until the Central Government notifies wage rates for the purposed of this Act, labourers shall be paid the statutory minimum wages fixed by the respective State Governments for the agricultural labourers”.

This puts in place a framework of completely flexible and arbitrary wages, without setting a lower bound linked to a minimal standard of living. At the moment, most centrally-sponsored programmes like the food for work, the SGRY, etc. support statutory minimum wages fixed by the respective state governments for agricultural labourers without administrative or legal difficulty. The present Act proposes to introduce the concept of wage flexibility without a minimum linked to cost of living in government programmes, which is not acceptable.

Recommendation: The wage should be no less than the current level of the minimum national reference wage/national advisory wage of Rs 66/-, which should be indexed to the All India CPI-AL for future revision.

OR

The centre should support the statutory minimum wages fixed by the respective state governments for agricultural labourers as in the case of the SGRY and the food for work programmes.

5. Section 8(3) ii The definition of works has been narrowed substantially and made even more stringent than before.

“The focus of the Programme shall be on works relating to water conservation, creation of additional irrigation potential through micro and mini irrigation, drought-proofing (including afforestation and tree-plantation) and wasteland-development.  Flood control and protection works (including drainage in water-logged areas), rural connectivity to provide all weather access and such other labour intensive activities, as may be notified by the Central Government from time to time, may also be included under the Programme.”.

While it is important that the scheme mobilises surplus labour for social and economic development through the creation of durable assets and provision of useful public services, over-specification will severely erode the ability of the scheme to provide employment guarantee.

Recommendation: All works undertaken under the Act should be productive in the broad sense that they contribute directly or indirectly to the provision of essential public services, the increase of production, the creation of durable assets, the preservation of the environment, or the improvement of the quality of life.

6. Section 16(5) “The wage component of the cost of the Programme shall be met by the Government of India.  The material component of the costs of the programme upto the percentage specified in clause (v) of sub-section (3) of Section 8, shall be shared by the Central and State Governments in the ratio of 3:1.  Any material cost in excess of the percentage prescribed shall, however, be paid by the State Government.  Unemployment allowance payable under the provisions of the Act shall be liability of the State Governments.”

The finances of state governments are under severe strain largely on account of policies beyond their control, including lower transfers from the centre than recommended by the Finance Commission, Fifth Pay Commission induced hikes in salaries and pensions of government employees, interest rate policy, access to borrowings, etc.

 
Recommendation: Financial structure to be designed along the lines of the food for work programme 

with 100 per cent funding by the center The wage contribution of the center must extend at least to a 

national norm initially fixed at no less than Rs 66 per day, and indexed to the All India CPI-AL for 

future revision. Additionally, the centre should finance material costs in the ratio of 70:30 labour: 

material. When there is a delay in the devolution of funds to the state government from the central 

Fund, the central government must reimburse the state government for the associated unemployment 

allowance payments. To meet the administrative costs of the Programme, the funds devolved by the centre

to each state should include an additional component amounting to 5 per cent of the total spending on wages 

and materials.

7. Section 15(i) There is an apprehension that women would be excluded from the scheme, which is dangerous in the context of abysmally low levels of poorly paid employment of women in rural areas. Unfortunately, the Act does not provide adequate safeguards against the exclusion of women from the scheme, which becomes relevant in the context of an Act that does not provide individual guarantee. The Act merely brings grievances relating to discrimination and harassment of women under the purview of the redressal mechanisms which will be prescribed by the state government under the rules.

Recommendation: The Act should safeguard the interests of women and give full attention to their concerns with regard to availability, location, type and organisation of work.  It should be ensured that at least 40 per cent of workers employed in a particular Block are women, so that women are not pushed disproportionately on to the unemployment allowance or out of the scheme.