The Government Should Scrap the NREGS

The Congress is on an upswing with what many classify as a decisive election victory. Naturally, this has led to much analysis on what the congress did to move its seat share from 140+ to 200+. One predominant belief is that the congress won on the back of its pro-poor policies - NREGS (National Rural Employee Guarantee Scheme) and the waiver of farm loans. However, my analysis of NREGs indicates that this is not an accurate hypothesis

In fact I pulled out some interesting trends from two states:

In Bihar, out of 23 districts that were covered since launch, the Congress won just two seats. In fact, sitting MP Shakeel Ahmed lost his Madhubani Seat.

In AP, where the Congress swept the elections, out of the 13 districts covered, they lost in 6 out of 13 seats.

The absence of a linkage between the implementation of the program and voting behaviour is not a huge suprise. Here are some reasons

a. There is enough research to show that the program is highly ineffective. Amongst those who have benefitted from the program only 50% expressed satisfaction with it
b. The program has not necessarily reached people who need it the most. This is due to a whole host of factors including caste, political orientation etc
c. Project identification, approval and implementation is a local activity and while this is good for empowerment, it has been observed that on every aspect from Identification to Implementation most projects have been failures . This is due to poor leadership, project management and implementation skills available at the panchayat and district level
d. Lastly but not the least, the lack of proper naming (Rajiv Yojana etc) means that voters donot associate the program with the Congress Govt.

During the last 2-3 years the Government has undertaken numerous steps to plug many of these holes including making it mandatory to open bank accounts. However, a large number of problems relating to project identification and implementation remain. While none of these problems are insurmountable one knows from past history that we will always find ways to circumvent checks and balances.
In light of this, the bigger questions are

a. What is the impact of NREGS on rural metrics including nourishment, health care, education etc?

b. If indeed the Government is confident of surmounting some of the problems that have been laid out, why shouldn't they be spending a similar effort on ensuring better delivery on Education, Healthcare, law enforcement, Water etc all of which are in shambles?

c. Is it wise to run such an expensive program while running a huge deficit ?

Going back to the election analysis, the congress gained most of its seats in urban areas and due to a combination of poor Governance by local Governments and a shift in minority vote in its favour. Therefore, probably the biggest learning from this election is probably to ensure proper governance to all voters rather than running expensive programs targetted at a few.

The Government jettisoned the communists late last year, they should do the same to the NREGS this year.