America’s New Deal & India’s Employment Guarantee Act 2


Comparisons are often drawn between the New Deal in USA and the Employment Guarantee Act in India (NREGA). One programme of new deal comes close to NREGA – Civilian Conservation Corps

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 (a list of major park projects through CCC). 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) met with Harry Hopkins and Harold [?] at two different times on a day to discuss CCC. 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 responded, ‘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 what 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, these are two different equally worthy goals for those in the administration. 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.


About Vivek Srinivasan

I work with the Program on Liberation Technology at Stanford University. Before this, I worked with the Right to Food Campaign and other rights based campaigns in India. To learn more, click here.


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2 thoughts on “America’s New Deal & India’s Employment Guarantee Act

  • Shankar

    You have righly pointed out the problem tangible asset creation.

    But the main drawback of the Act is that is too focused on manual labour, which hardly adds to the productivity of the nation.

    Instead I firmly believe NREGA must also include paid training worshops for such unemployed rural people, so that they are equipped with skill set for a better job prospects.

    e.g. rural un-employed women can be trained to become assitants at Primary Health Centers(PHCs or under ASHA Scheme), Anganwadi centers etc.

  • vivek

    Hi Shankar: Thanks for the comment. I agree with you that there is a need for greater “skill generation” including an expansion of basic education, technical schools and other measures. I am somewhat sceptical of short term skill generation programmes of which we have had many including TRYSEM. I see a lot of potential in NREGA and I feel that programmes it should co-exist with skill generation programmes. There is no reason why these should be either-or, or for that matter we should not expect NREGA to be our umbrella for all our ambitions.

    I feel that you greatly underestimate the potential of NREGA. I witnessed many impressive works last year when I was doing my field work and am confident that these could be replicated elsewhere. The reason why such impressive works do not happen in most places is not because manual labour is not capable of being productive. I think two other reasons are paramount: one, creating useful assets has a relatively long term impact on which we seem to pay much less attention as a society. Two, technical support and the time taken to plan good works is minimal. The engineers who are supposed plan these works are so overburdened in almost every state and have so little information resources (like rainfall data, detailed maps, etc.) that they are unable to put the time required to do a good plan. People living in these villages are typically highly resourceful…but using collective wisdom is a long process on which we have not put our resources.
    What we need to do is to generate the will required to make planning a priority. That would be important irrespective of NREGA. Water management, soil conservation, afforestation and other things are so fundamentally important but ignored that we cannot afford not to be a priority – at least forever. And if we do make them a collective priority, I feel that NREGA is the best mechanism available to deliver us the goods.

    Thank you for writing in: Vivek