More than just scheming

Anyone who has lived and travelled in India knows that real poverty is not to be seen in its cities, visual evidence to the contrary notwithstanding.

Anyone who has lived and travelled in India knows that real poverty is not to be seen in its cities, visual evidence to the contrary notwithstanding. It resides in out-of-the-way districts and in villages where people die quietly from slow starvation and an unconscionable number of children never reach the age when they are able to walk. For this reason, despite scepticism about the government’s managerial abilities to execute the project, we welcome the National Rural Employment Guarantee Act. No Indian should remain poor, and no effort should be spared to ensure this. In a country with no social safety net, the NREG Act, which came into operation last week, represents a small corrective. Considering that the scheme offers the bare minimum of a job for one family member at the level of the statutory minimum wage for 100 days, it is just about a lifeline.

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India has had a long history of poverty alleviation and rural development schemes. Yet their common feature seems to have been that the assets they were supposed to have created turned out to be built on sand. So while the scheme could help boost rural wages and the purchasing power of the poor, it is vital that the resources sought to be built are durable and can trigger a makeover of our depressed countryside. This is not a goal that stands by itself, but is vital for the larger transformation of the country. Not a few critics have said that the NREG scheme has the potential of widening the fiscal deficit, pushing up interest rates and having a negative impact across the economy. Others have said that experience of similar schemes, such as the one in Maharashtra, would suggest that the government is merely throwing money down the drain.