Don’t Curb NREGS ( Times Of India)

Though it remains susceptible to leakages and can do with greater oversight, the National Rural Employment Guarantee scheme (NREGS) appears to have boosted rural incomes by providing job seekers at least 100 days’ guaranteed labour every financial year. That’s why the Union rural development ministry’s reported advisory to states to ‘informally’ suspend NREGS operations during peak farming season isn’t a very good idea. For starters, the move would be legally dicey. By law, the authorities can’t deny work to members of eligible households who ask for it.

Nor can labour scarcity during the sowing, transplanting and harvesting season be countered just by deactivating a programme whose very purpose is to provide rural citizens an employment avenue. Given its ‘informal’ nature, this move could lead to all manner of official arbitrariness and ham-handedness in dealing with poor people who seek NREGS work. If NREGS sets a floor wage as is being assumed, then it stands to reason that those who want to hire farm hands during peak season should simply pay them more. That shouldn’t be a problem when it’s peak season. And if NREGS doesn’t set a floor wage, then there’s no justification whatsoever for cutting back on it on the basis of this assumption.

Policymakers may want a lid kept on farm labour costs, as they’re concerned about the rejigging of minimum support prices required due to rising wages, as also the latter’s inflationary impact. On both counts, however, the real solution is to vigorously push reform. Let’s get real. In fast-developing India with its domestic demand-driven economy, income rise is inevitable. We should welcome the fact that poverty is on a southbound trend and rural wages are increasing, as surveys show. Real individual spending in the countryside rose 6.3% from 2004-05 to 2009-10. In urban India, the increase is even bigger. From soap makers to auto manufacturers, companies now wish to tap our buoyant rural market whether to sell detergent or two-wheelers and cars.

We must encourage, not hamper, these trends for growth’s benefits to accrue across the social board. If agriculture is modernised and gets improved supply chain infrastructure, productivity and profits will rise. The sector will then better absorb higher wages. Clearly, we need retail and marketing reform to attract private funds to agriculture. Farmers linked to buyers will see boosted incomes. With quality research and technological inputs, farm output will rise. That’ll help beat inflation by meeting the country’s growing food needs. Finally, effective poverty eradication requires going beyond NREGS. With labour reform, easier land acquisition and better infrastructure, millions of rural hands can access secure and better-paying factory jobs. We talk about inclusive growth. Reform is the way to walk that talk.