Author: Swapan DasGupta
Publication: The Free Press Journal
Date: August 22, 2005
URL: http://www.samachar.com/features/220805-features.html
Now that we have waved our little tricolours
on Independence Day and got all inspired by Aamir Khan doing his Mangal Pandey
number, Parliament of India is going to meekly acquiesce in one of the most
brazen acts of national subversion. I am referring to a legislation that in
all fairness should be called the Corruption Guarantee Scheme rather than
the Rural Employment Guarantee Act (REGA).
The most incredible feature of this planned
drain of wealth from the productive sector to the underground economy is that
no one knows how much is at stake. The conservative estimate is that it will
cost Rs 40,000 crore to provide 100 days of alleged work to 40 lakh people.
Others suggest that the costs could go up to as much as Rs 1,50,000 crore.
The economist Bibek Debroy, whose institutional affiliation does disservice
to his professional competence, has even suggested that the costs of servicing
REGA could be around Rs 2,08, 000 crore per year. We are not talking loose
change, there is serious money involved!
REGA is said to be the pipedream of Sonia
Gandhi. Egged on by some wild-Left faculty members of Jawaharlal Nehru University
and some anti-globalisation activists who make a living out of poverty, she
has decided REGA-which will no doubt be renamed in due course after a Gandhi-is
her way of perpetuating the populist legacy of Indira Gandhi. REGA represents
the high point of the Congress president's lady bountiful act.
The consequences will be catastrophic. In
1987, Rajiv Gandhi rued the fact that less than 15 per cent of every rupee
spent on anti-poverty programmes reached the actual beneficiaries. Studies
of numerous welfare schemes initiated by the Centre and state governments
suggest that there is no reason to revise the former prime minister's assessment.
"The record of anti-poverty programmes in India", writes Jean Dreze,
one of those jholawala experts behind REGA, "is far from encouraging."
Referring to his own study of the Food for
Work programme, Dreze admits that "much of (its) potential has been wasted
due to widespread corruption." Outlook magazine quotes Planning Commission
sources that West Bengal, "despite its self-positioning as a worker's
paradise, has one of the worst records in wage schemes, as the party cadre
are in complete control of the beneficiary list." Anti-poverty programmes
end up as the state funding of political expenditure of the Comrades.
The apprehensions are not right-wing alarmism.
They are based on rational assessments of the flawed delivery systems available
to the Government. If casual journalistic inquiries could straight away expose
a Rs 9-crore scam in the the Maharashtra Employment Guarantee Scheme in just
one district, we can only speculate the amount of leakage in a national scheme
to dig holes and fill them again.
If this is the dismal track record, why is
the Government embarking on a scheme that will inevitably entail fresh doses
of taxation and an erosion of India's competitiveness? Why is the National
Advisory Council contemplating another cess on income and services that will
fund welfare schemes for some 30 crore workers in the unorganised sector?
What is the rationale behind the high-tax, high-approach of the Government
that is guaranteed to nullify India's emergence as an economic power house?
On the face of it, the Congress is merely
translating its avowed concern for the aam aadmi (common person). However,
Dreze gives the game away. A "strong national (R)EGA", he writes,
is likely to lead to a flourishing of activist organisations that would help
mobilise the poor in their interest. It is a political initiative." Cut
out the sophistry and here is one of the regime's favourite jholawala economists
admitting that REGA is just a ruse to nurture countless NGOs that can be put
to the service of the Congress and Left during elections.
Dreze's sincerity is unquestioned and his
concern is to create more NGOs. What he ignores is that the Congress is not
all about grassroots self-initiative. As a party, the Congress is built on
a network of patronage. Earlier, it was the public sector that ensured an
unending supply of funds. Today, the focus has shifted to a mega-scheme that
will be funded by the productive sectors of the economy.
For the past 14 months, India is witnessing
the creeping deterioration of its productive infrastructure. The July 26 deluge
in Mumbai was perhaps the most dramatic manifestation of things going horribly
wrong. But it is the same story in Hyderabad and Bangalore cities that are
being showcased as the future of a knowledge-based India. Since the BJP's
India Shining campaign ended in disaster in May 2004, it has become impolitic
to advocate the fasttrack to economic prosperity.
Despite the Prime Minister's proforma promise
to transform Mumbai into Shanghai and the Finance Minister's measured assurances
about the future, there are good reasons to believe that the steady gains
made since the mid-1990s may be dissipated. Just witness the contempt with
which the political class dismissed well-intentioned pleas of Mumbai citizens
to plough back a fraction of the Rs 40,000 crore the city contributes in taxes.
As things stand today, the total government investment on Mumbai is around
Rs 1,000 crore or only 2.5 per cent of what it contributes.
What is ominous is the direction of political
economy. For all its other shortcomings, the NDA Government was broadly committed
to gradually scaling down government and lowering taxation. Yashwant Sinha
was, in fact, removed as Finance Minister in 2003 because he wanted to reverse
the direction. In 14 months, the UPA Government has reversed both these trends.
Under the cover of the Common Minimum Programme, it has gleefully embraced
a high-tax and highspend approach to economic management.
The subtext of the Rs 1,74,000 crore the Government
wants to spend in the next four years on Bharat Nirman is that India is going
to drift into the high-tax zone. That's because all the money we already pay
as taxes is going into financing the next election campaign for the Congress
and the Left.
It's a sad tale. In REGA we are not only witnessing
the institutionalisation of corruption, we are witnessing decision- making
pass into the hands of those who have no stake in the future of India. Just
when thought we are ready to take-off, there is a Gandhi to bring us crashing
back to the Third World.
