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Employment Guarantee Act: What it Promises, What it Doesn’t

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  • Shaji John K
    November 16, 2005 Employment Guarantee Act: What it Promises, What it Doesn t The employment guarantee bill, passed by the Lok Sabha in August 2005 guarantees
    Message 1 of 1 , Nov 29, 2005
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      November 16, 2005

      Employment Guarantee Act: What it Promises, What it Doesn't

      The employment guarantee bill, passed by the Lok Sabha in August 2005
      guarantees employment for one hundred days every year to every rural
      household, at minimum wage. The act is a significant one –with the
      government for the first time acknowledging that it has responsibility
      towards providing some measure of employment protection to the citizens.

      The first part of this series carried the salient features of this
      bill. This bill has been welcomed by all in its intent – in that the
      state is now acknowledging its responsibility in supporting employment
      opportunities to the people. However, the bill that has been passed
      has raised some concerns about the rural empowerment that was promised
      and how the current legislation might have diluted those promises.


      1. Employment is guaranteed to one adult per household below the
      poverty line, irrespective of household size. Several issues arise
      because of this: a. The central government proposes to fix wage rates,
      at a minimum rate of Rs 60 per day. At this rate, families with only
      one earning member would still remain under the poverty line
      ($1/person/day). Wages at Rs. 60/ day – amounting to Rs. 6000 per
      year, would not be sufficient to provide for an entire family. b.
      Also, till the central government notifies different wage rates for
      different areas, the state governments are free to pay their own
      statutory minimum wage for agricultural/rural workers minimum wage
      rate under the programme ( ranging from Rs. 25 per day in Nagaland to
      Rs. 134 / day in Kerala ), which would mean people from some states
      would have to sustain themselves and their families under even tighter
      conditions. Delays by the centre in setting wage rates would further
      aggravate this situation. c. Further, with only one adult member from
      a household getting guaranteed work under the scheme - the selection
      of the actual beneficiary of the scheme potentially can cause
      friction, discontent in the family. Though the act does mandate that
      at least one third of the beneficiaries of the scheme shall be women
      who have registered for employment, it is feared that given family
      dynamics, many women will not be allowed to register for the scheme.

      2. People shall be employed under this scheme for doing manual,
      unskilled labour. However, there is no provision for training these
      people to upgrade their skills, so that they need not be permanently
      reliant on such projects. The original draft of the bill did call for
      providing training for these labourers, as far as possible; that
      clause is not included in the final Act.

      3. There is no provision in the final act for employment of citizens
      with disabilities, though there was a clause to that effect in the
      original draft.

      4. Finances: a. The scheme would cost about Rs 40,000 crore annually,
      with the State governments funding about 10% of the costs. It is not
      clear how many states will be able to foot the bill on their own,
      given their fiscal conditions. Also, there is no provision for a
      dedicated fund to generate funds for this scheme at a sustained level.
      b. By the anti-corruption clause introduced in the act, the government
      may order stoppage of funds to the scheme if there are complaints
      about improper fund utilization. While the intent of this provision is
      reasonable and ostensibly aims at preventing corruption, it can be
      misused and funds may be stopped at slightest the slightest suspicion
      of corruption, which would ultimately result in no work for the
      people. More stringent monitoring and transparency clauses need to be
      in place to help counter corruption in he first place.

      5. Implementation: a. The administrative structure outlined by the act
      is similar to the Maharashtra Employment Guarantee Scheme model. No
      major administrative reform has been suggested to increase efficiency
      in implementation of this act. It is feared that states with histories
      of bad governance will not be able to provide the empowerment
      envisioned by the act, within the time frame set by it.

      6. Redressal / Corruption check mechanisms – a. One of the biggest
      fears of failure or inefficacy of this scheme is vast opportunities
      for corruption and siphoning of funds. With the Maharashtra Employment
      Guarantee Scheme recently suffering a Rs 9-crore scam in Solapur
      district , similar apprehensions about the national act naturally
      arise. The redressal mechanism against contravention charges laid down
      by the act at Rs. 1000 are too mild and need to be stiffer. An
      independent monitoring entity, transparency in muster rolls (which
      must be made available free of cost), public awareness, local
      agitations can check abuses of the system.

      - Ranjana Ghosh
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