New Indian minister promises to reform flagship welfare programme ? report

by Nita Bhalla | @nitabhalla | Thomson Reuters Foundation
Friday, 29 July 2011 14:00 GMT

Rural development minister plans to overhaul country's biggest anti-poverty scheme to tackle corruption and mismanagement

NEW DELHI (TrustLaw) – India’s new rural development minister plans to reform the country’s biggest anti-poverty scheme which is beset by corruption and mismanagement, the Hindustan Times reported on Friday.

Costing 1 percent of GDP, the flagship National Rural Employment Guarantee Act (NREGA) is the largest of India's welfare schemes and is designed to protect the country's 500 million poor by providing them with 100 days of employment every year.

But critics say the programme is wasteful and riddled with corruption, and the infrastructure created is of shoddy quality. The ministry plans to tighten laws and improve transparency.

The new minister Jairam Ramesh said his ministry would prepare changes to make the law more effective in providing employment to rural households, and would tackle the problems of corruption, according to the report,

"We are bringing the reform measures to deal with serious issues like delay in wage payments to NREGA workers. If needed, we will amend the act," said Ramesh, who was the former environment minister.

"There are major structural issues in NREGA which need to be addressed immediately."

Under the programme, any villager can go to a nearby government office and enrol for building roads, digging wells or creating other rural infrastructure and be paid the minimum wage for 100 days a year.

That income has helped improve nutrition levels and reduce child labour, especially at times when crops fail or prices shoot up. It has raised rural consumption, which has created new markets and shored up growth when investment has faltered.

But a recent World Bank study on welfare programmes in India said they - which included NREGA - did not give the "bang for the rupee" warranted from such huge spending.

The government's schemes, it said, suffer from poor implementation, red tape and corruption - common ailments that worry investors in Asia's third-largest economy.


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