Employment Guarantee: A Distant Dream
The
Common Minimum Programme did strongly foreground the issue of employment
generation and the necessity for a pro-active public policy geared towards
this all-important objective. Yet the 2004-5 budget, the first budget
of the non-NDA coalition government reflecting its actual macroeconomic
priorities as against its own popular rhetoric, has not addressed the
issue of employment generation at all.
Data
emerging at the end of the nineties showed the dismal performance of
the employment indicators over the decade. Annual growth of rural employment
was around 0.5 per cent per annum between 1993-94 and 1999-00 as compared
to 1.7 per cent per annum between 1983 and 1993-94. The daily status
unemployment rate in rural areas increased from 5.63 per cent in 1993-94
to 7.21 per cent in 1999-00. (Dev, 2003) Growth of agricultural employment
which still accounts for more than 60 percent of overall employment
declined in absolute terms over this period (see graph below). Rural
non-farm employment growth, where the large number of residual workers
from agriculture transit, also showed slower employment growth (3.28
and 2.14 percent per annum during 1983-93 and 1994-2000 respectively).
The overall employment growth in the economy dropped from 2.04 per cent
during 1983-93 to 0.98 per cent per annum during 1994-2000. Ostensibly,
the strong growth in the urban services sector failed to make up for
the tardy employment growth elsewhere in the economy.
The
deceleration in employment growth was further reinforced by a sharp
cutback in public spending on rural employment programmes since the
mid-nineties. Dev (2002) notes the marked fall in the share of rural
employment programmes in center's expenditure on social sector. As a
percentage of GDP, expenditure on both rural wage employment programmes
and special programmes for rural development, which includes the traditional
self-employment programme Integrated Rural Development Programme and
its new incarnation Swarnajayanti Gram Swarojgar Yojana, declined since
the mid-1990s. Central Allocation on rural wage employment programme
came down from 0.40 percent of GDP in 1995-6 to 0.13 percent of GDP
in 2000-1, and that on special programmes for rural development fell
from 0.08 to 0.03 percent of GDP. Official justification for the cutback
in public spending on these programmes was sought in the shift in accepted
paradigm among the multilateral donors from traditional methods of addressing
poverty through employment generation to basic needs intervention. Social
sector expenditure would henceforth be directed towards basic provisioning
of education, health, drinking water, while markets could take care
of employment generation. Of course, the whole social sector would increasingly
be treated as residual that would absorb shocks on behalf of fiscal
disciplining.
The initial three years of NDA rule were some of the worst years to
witness alarming declines in public outlay on rural employment programmes
in absolute terms (see Table below). It was only in 2002-3 that the
budgetary allocation (BE) on wage employment programmes returned to
the 1998-9 level (crossed Rs 4,000 crore). The severe all-India drought
in 2002-3 and the natural calamities affecting 12 states in 2003-4 forced
a revision of the budget for this head by substantial amounts in both
the years. This is reflected as adjustments in foodgrain component and
special component of Sampoorna Gramin Rozgar Yojana in the revised statement
of the budget whereas the ex ante allocations (budget estimates) did
not respond to the increased demand for employment.[1]
Budgetary
Allocations by the Central Government on Rural Employment Programmes (Rupees Crores) |
||||||||||||||
1998- 99 |
1999- 2000 |
2000- 01 |
2001- 02 |
2002- 03 |
2003- 04 |
2004-05 |
||||||||
BE |
RE |
BE |
RE |
BE |
RE |
BE |
RE |
BE |
RE |
BE |
RE |
BE |
||
(I) |
Swarnajayanti Gram Swarojgar Yojana* | 740 |
651 |
859 |
950 |
900 |
370 |
450 |
480 |
656 |
656 |
720 |
720 |
900 |
(II) |
Total Rural Employment | 4085 |
4050 |
3795 |
3729 |
2655 |
2798 |
2925 |
4225 |
4596 |
9502 |
4488 |
9640 |
4590 |
A |
Sampoorna Gramin Rozgar Yojana | 2925 |
3425 |
3996 |
8642 |
4488 |
9640 |
4590 |
||||||
| Cash Component | 2925 |
3425 |
3375 |
3375 |
3713 |
3713 |
4050 |
|||||||
| Foodgrain Component | - |
- |
621 |
5267 |
775 |
1039 |
260 |
|||||||
| Special Component | - |
- |
- |
- |
- |
4889 |
280 |
|||||||
B |
Jawahar Gram Samridhi Yojana | 2099 |
2060 |
2095 |
1689 |
1485 |
1345 |
|||||||
C |
Employment
Assurance Scheme (including Food for Work Programme) |
1990 |
1990 |
1700 |
2040 |
1170 |
1453 |
800 |
600 |
860 |
- |
- |
- |
|
*
Allocation for 1998-9 refer to Integrated Rural Development Programme,
which was replaced by a new rural self-employment programme, Swarnajayanti
Gram Rozgar Yojana, in the millennium year. BE: Budget Estimate; RE: Revised Estimate. |
||||||||||||||
Source:
Expenditure Budget, Volume 2, Government of India (various years) |
||||||||||||||
The
promise of 'assured 100 days employment to the breadwinner in each family
at the minimum wage' in the Common Minimum Programme did raise expectations
of reversal of this regressive trend. But all that the budget pronouncements
have done is to promise to reify the assurance through a formal legislation
- the National Employment Guarantee Act - in the future. The budget
has not made any extra allocations for 2004-5, over what was announced
in the interim budget. Even if the entire sum of Rs.10,000 crores, the
gross budgetary support, be used in employment generation, it would
not be sufficient to guarantee 100 days of employment to each family
in need of employment in the country.[2] And obviously, there
are many many other assurances in the budget that the sum of Rs 10,000
crore would be expected to fulfill.
The 2004-5 budget has announced a new Food for Work programme in 150
districts classified as most backward and identified as areas in immediate
need of such a programme. This programme is to be funded by cutting
down allocations under the existing rural development programmes. Targeting
of public expenditure is a salient feature of neo-liberal fiscal strategy,
and the big move towards this strategy in India was observed with the
transformation of public distribution system to targeted public distribution
system. The new Food for Work programme without any budgetary provision
mirrors the same logic. Targeting spending towards the poorest, a concept
popularized by the World Bank in the recent years, increases the benefit
derived from the same volume of public spending and therefore maximizes
the so-called efficiency of public spending. More targeting then becomes
consistent with less spending!
While the budget of 2004-5 proclaims an universal employment guarantee,
the present set of policies on direct employment generation through
public spending forebodes an exactly opposite scenario with restricted
and targeted public spending. Let us not be mistaken in thinking that
this is the beginning of a major turnaround.
References:
Dev, S. Mahendra and Jos Mooij (2002) “Social Sector Expenditures in
the 1990s: Analysis of Central and State Budgets” Economic and Political
Weekly, March 2.
Dev, S. Mahendra (2003) “Agriculture, Employment and Social Sector Neglected,
Economic and Political Weekly, April 5.
[1]
Under the Special component of the Sampoorna Gramin Rozgar Yojana, FCI
releases foodgrains free of cost to states/UTs for augmenting food security
through additional wage employment during natural calamity.
[2] See India's Budget: A Disappointing Blend by C.P.
Chandrasekhar
http://networkideas.org/news/jul2004/news12_Budget_2004.htm