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A workable right to employment

By Mihir Shah

For an employment guarantee programme to work, it must be focussed on labour-absorbing activities and technologies, which lead to growth that in turn provides more jobs.

IT IS heartening that for the first time since Independence the Government of India is genuinely trying to grapple with the nuts and bolts of providing an employment guarantee to its people. A Constitution that feels obliged to protect the right to private property must surely feel similarly obliged to guarantee the right to work, especially when six decades of planned development has failed to do so.

Following the explosive rise in unemployment through the 1920s, many Western capitalist countries introduced different forms of unemployment insurance. By the 1980s, the Constitutions of 30 countries, including 18 developing nations, had incorporated the right to work. In 25 countries this right is specified as a work guarantee. The Indian Constitution does include the right to work (via Article 41) but this is not a part of the Fundamental Rights, figuring only in the Directive Principles.

Various judgments of the Supreme Court have suggested that the state must place the Directive Principles on a par with Fundamental Rights. Whether this constitutional obligation is fortified by making the right to work a Fundamental Right or a stronger meaning is attributed to the Directive Principles, either way the state has an obligation to protect its people from unemployment. India being a signatory to the Universal Declaration of Human Rights and the ILO Covenant on Economic, Social and Cultural Rights (both of which incorporate the right to work), there is an international imperative as well.

Planning in India began with the presumption that the only salvation for millions of unemployed in the countryside was for them to get work in industries set up in urban areas. The massive droughts of the mid-1960s forced a policy rethink. This resulted in the Green Revolution of the next two decades. But the revolution proved short-lived. Focussed primarily on rice and wheat in the already well-endowed alluvial pockets of India, it led to a monumental neglect of our poorest regions. The result — intense concentration of poverty and distress in certain pockets. And economic development increasingly characterised by widening disparities across States. Those lagging behind include the drylands, tribal and hilly belts.

Millions of poor peasants here are forced to look for work outside their own farms to make ends meet. National Sample Survey data show that nearly 80 per cent of agricultural labour families in India own land. But the capacity of their farms to provide work has been decimated by years of environmental degradation. So they are compelled to work outside as labourers.

Public investment directed at increasing the labour-supporting capacity of these farms through massive rainwater harvesting, soil conservation and treatment of their catchment areas must form the centrepiece of a rural employment guarantee in India. To this should be added investments required in education and health care. This would ensure five things. One, that the employment guarantee would not merely provide relief in times of distress, it would also be a move towards long-term drought and flood-proofing of Indian agriculture.

Two, that the economy moves on to a more sustainable growth path, less vulnerable to the vicissitudes of nature. Three, that growth will become more effective as an instrument for reducing poverty. Studies have shown that the impact of growth on poverty is higher in areas where the social infrastructure is more developed. Where people are educated and healthy, and have access to safe drinking water, they are better able to seize upon development opportunities. So all investments will begin to yield progressively higher returns in these hitherto neglected regions.

Four, that the number of people who depend on a state-sponsored employment guarantee would steadily decline over time because they could revert to their own farms as also because of a reduction in poverty. Five, that the expenditure incurred on the employment guarantee would be productive, boosting the growth rate of the economy as a whole. Fuelling successive rounds of private investment, it would also create secondary employment opportunities. The extent to which investment can impact poverty and unemployment depends critically upon the forms in which it is embodied. For an employment guarantee to work, it must be focussed on labour-absorbing activities and technologies, which lead to growth that in turn provides more jobs.

This would make the employment guarantee truly sustainable in both environmental and fiscal terms. Economic thinking the world over has in the last two decades been increasingly dominated by a static fiscal fundamentalism. What this line of thinking fails to recognise are the dynamic growth-enhancing dimensions of national investments that, in a country like India, only the Government can make. These investments are in any case the most critical national priorities — universal access to primary education, healthcare, water, food and work.

It is a crying shame that nearly 60 years after Independence we have failed to secure them for our people. An employment guarantee focussed on these can fuel growth that would in turn help lower the fiscal deficit. For as incomes rise, so would government revenues. At two per cent of GDP this would be a small price for a social safety net. It would also be a very sound investment to make. And the way we visualise it, the size of the guarantee to be provided by government should fall over time as people's need to work outside their farms declines. No Fiscal Responsibility Act should override these national priorities. We do not want a zero fiscal deficit that leaves millions of our people hungry, ill, uneducated and out of work.

But to ensure that the burden of expenditure does indeed reduce over time, we must pay the greatest attention to the area of implementation. For it is true that hundreds of thousands of crores spent on such programmes over the last several decades have largely gone down the drain or lined various pockets. This is the real challenge facing the UPA Government. The nuts and bolts with which it is currently grappling are crucial. Strong social audit mechanisms and penalties are mandatory. This is not merely a matter of preventing fudging of labour payment muster rolls.

The much more creative dimensions of corruption arise from the way the Schedule of Rates is deployed both to embroider estimates and cheat labour. Over the last decade of soiling our hands with implementing these programmes on half a million acres of land in four of the most backward States of the country, we have learnt the people have to be involved in all aspects of the work, including site selection, cost estimation and the way work will be measured and paid.

The last is the most crucial if we are to secure statutory minimum wages for labour. This is also the only way to achieve required productivity norms. It involves an intense dialogue through regular public hearings led by those who are to work at the site. Public hearings are also a must for transparent presentation of the details of money sanctioned and payments made.

Indications are that the UPA Government proposes to restrict the employment guarantee to just 100 days of work. This would be a serious mistake. The right to work is to be exercised by people in need. These needs will vary depending on the vagaries of nature. They could be for more or less than 100 days. In years and areas of severe drought the requirement could be greater. In other seasons and places, the demand for work will be less. Is the Government saying that it will not respect this right when people need it the most?

An Act is different from a government scheme. The financial allocations for schemes can vary from year to year. The scheme can even be extended to different parts of the country in a phased manner, starting with the poorest districts. If the necessity for it declines over time, as it should if implemented properly in the right direction, the allocations can be reduced. But the whole point of an Employment Guarantee Act (EGA) must surely be to provide work to people as a matter of right when their need is the greatest. We require an EGA that enshrines this commitment and a system by which work could be channelled to the most productive avenues in a socially accountable manner.

(The writer is an economist who leads Samaj Pragati Sahayog, a grass-roots initiative for water and food security in the tribal drylands of India.)

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