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NREGA, the bone of contention

    N. Bobo Meitei
    By N. Bobo Meitei, Delhi,
    Fri, Oct 17th, 2014 (04:00:00 PM IST) Section: Industry Category: Policy

    From misappropriation to suggestion for dilution and many opposing its dilution, MGNREGA has been put on spotlight lately.

    NREGA, the bone of contention

    From misappropriation to suggestion for dilution and many opposing its dilution, MGNREGA has been put on spotlight lately. Recently, the Centre has asked states to focus its implementation in the 2,500 blocks designated as backward under the Intensive Participatory Planning Exercise. But it has drawn attack from social activists and NGOs. It is believed that the call may have also been motivated by the recent discontent among large farm holders that NREGA has made farm labour scarce and expensive, and thus agriculture being made unsustainable.

    Opposing the reported move, Chief Minister Mamata Banerjee has announced that she will fight it. She criticized the move, saying it can only spell disaster for the poor people of the country. "West Bengal is the first state to protest against the central government's unjust decision to curtail the scope of 100 days' work, which is against the fundamental principle of the Act to benefit the downtrodden people of rural India," says Banerjee’s Facebook post.

    Making the call more vocal, several prominent economists have written to Prime Minister Narendra Modi opposing their opposition against the move. The economists, from Princeton, Berkley, Texas-Austin, LSE and IITs, have argued that the gains accrued from NREGA far outweighs the negatives, and diluting NREGA will have an adverse impact on rural economy. Some are of the opinion that unbridled economic liberalisation has made governments pay more attentive towards industry than farming.

    But the claim that NREGA is behind the massive spurt in wages in rural areas is being disputed by RBI Governor Raghuram Rajan, "There is clearly a lot of sense that this has increased rural wages tremendously. I would argue that clean, trustworthy studies say that the effect was may be 10 per cent."

    Rajan believes that factors such as rise in minimum support price of food items, better realisations for food commodities in the international markets, shift of labour to the building industry, coupled with a gradual withdrawal of women from the workforce have caused the spike.

    The government, however, maintains that NREGA was “much exploited” for partisan purposes by UPA, and it intends to go ahead with its reforms, ignoring widespread protests. This came a day after top economists wrote to Prime Minister Narendra Modi to urge him not to make major changes in its guidelines.

    Observing the developments, it is too early to conclude that the Modi-led government will do anything that could create an unwanted political atmosphere.