America’s New Deal & India’s Employment Guarantee Act

The Government of India passed the all-important National Rural Employment Guarantee Act (NREGA) in 2005 (for an intro click here). Whenever I mention it to my friends in USA the first question they ask me is, “is this like the new-deal”. The new deal has many similarities with NREGA, but is a much wider concept. NREGA is a programme dealing exclusively with labour-intensive, unskilled work. Employment programmes under new deal were much wider in scope including large-scale employment of artists, writers, among others. There were so many agencies and programmes under new deal that Roosevelt’s administration was called the ‘alphabet-soup government’ (due to acronyms such as WPA, CCC, etc.). In this alphabet soup, one programme comes close to NREGA – that is Civilian  Conservation Corps (CCC). CCC aimed at creating employment under the condition of mass unemployment and in the process assist environmental regeneration. CCC and other fellow programmes are credited with creating numerous national parks in the US, soil conservation, reforestation, and other important feats that have improved the environment in this country. Let me pause for a moment to confess that I have read only a little about CCC so far, and am not acquainted with its criticism – hopefully, I will work on it soon. In any case, the ambition of NREGA is similar to CCC – to provide employment so that people do not suffer from hunger and destitution and at the same time create useful assets. Among useful assets are ‘Jal, Jungle, Jameen’ i.e. water, afforestation and soil conservation.

Employment or assets?

One of the many criticisms of the Employment Guarantee Act is that projects often do not create useful assets. Critics argue that if transfer of money to poor people is the aim, then it is better done directly rather than making people do hard work that yields nothing. Even if NREGA yields no assets, it serves a useful ‘selection’ function i.e. since only poor people tend to take up hard physical work for minimum wage, NREGA ensures that money goes to people who need it the most. That said, the argument that NREGA is not creating assets is a serious one and should get the attention it deserves. I have not come across detailed studies about asset creation by NREGA. What we know of it so far is from the record of Employment Guarantee Scheme in Maharashtra and of the various food-for-work programmes across India. There is some evidence in Maharashtra that it had a good impact on some sectors – particularly horticulture. But on the whole I think there is some merit to the notion that wage-employment programmes did not produce useful assets. Given the potential do good work, this is a pity. Somehow there seems to be a division between creating employment and assets – at least administratively. Interestingly, the debate on whether wage-employment programmes should concentrate on creating employment or assets is neither new nor restricted to India. When the debate was raging in 1930s FDR (then president of USA) Harry Hopkins and one Harold on a particular day. When Harry Hopkins argued that employment should get the priority and FDR answered, ‘you are perfectly right’. Later in the day Harold argued that assets should get the emphasis and FDR answered, ‘you are perfectly right’. His wife had watched the two and she confronted him that he had said both opposing views were correct. FDR looked at Eleanor for a moment and said, ‘you know dear, you are perfectly right’ [Recounted by J K Galbraith in a talk at Harvard May 9, 2002]. While one would think that there is a great deal of synchrony between employment and asset creation – administratively speaking they are two different equally worthy goals. Unfortunately though, within the scope of wage employment programmes such as NREGA, employment is the gaze with which the government looks and so asset creation does not get the emphasis it deserves. If the claims that I read about CCC were true, it has had remarkable achievements in a short span. Due to environmental mismanagement in the last century there were many environmental disasters in the mid-west including periodic floods, massive erosion of topsoil, etc. CCC worked in restoring things in important ways. Many parks were created that people continue to enjoy till today.

Employment for Environment

There is no question that India needs to invest in its environment, water, land and other resources. With our vast human resources, these are well within our reach. The question though is whether we will start putting our attention to these issues. NREGA offers the perfect opportunity for us to give environment the attention it deserves. With some push, we can make a lot happen.  Let the slogan be Employment for Environment.

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