MGNREGA: The wrong answer to rural distress

A permanent entitlements strategy does little to address the real problems

A political fist fight has broken out on the 10th anniversary of the landmark Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA), which guarantees 100 days of work a year to every rural household. Prime Minister Narendra Modi in a stinging speech last year described the rural jobs scheme as a monument to the failures of the United Progressive Alliance government. His government is now indicating that it will increase spending on the scheme in this year of a second successive drought. The Congress has hit back with accusations of hypocrisy.

MGNREGA is the biggest single public works programme in the world. It provides employment to around one in every six Indian families, according to the World Bank. The vocal defenders of the scheme point to its range of achievements—from empowerment of the rural poor and a push to financial inclusion to the rise in rural wages and prevention of urban migration. But these are unintended consequences that may have also emerged had other solutions such as direct cash transfers been given a fair chance.

As with any other policy intervention, MGNREGA has to be assessed in terms of its own policy goal, as defined by the 2005 law that established the scheme. The law says it seeks to “provide for the enhancement of livelihood security of the households in rural areas of the country by providing for at least one hundred days of guaranteed wage employment in every financial year to every household…” The main challenge that the scheme sets out for itself is clearly to provide livelihood security to rural households. There are two questions that defenders of the rural jobs scheme need to answer. First, is there indeed greater livelihood security in the villages 10 years on? Second, wouldn’t direct income support through cash transfers be a better way to reach the goal?

Successive governments have spent an estimated Rs.3.1 trillion on MGNREGA schemes over the past decade. This is not a small sum of money, especially if spending in past years were to be converted to current prices to take care of inflation. The impact of such spending would have been far higher if the money had been used for rural infrastructure that would have raised productivity as well as helped the structural transformation of the rural economy.

This does not mean that the government should not spend on public works when there is rural distress. There is right now a strong case for higher government spending to ease the pain in Indian villages. Even the colonial government understood this: public works were funded during the terrible droughts of the 1870s. This newspaper supports higher rural spending in drought years. MGNREGA is something quite different. It is a permanent scheme that is not linked with the state of the rural economy. Those who ask whether critics of MGNREGA would want the government to cut back on help in a year of rural distress are essentially setting up a straw man.

Few care to remember today that India is just coming out of an inflation crisis. One part of the sorry tryst with high inflation is that MGNREGA pushed up rural wages without having much of an impact on rural productivity. Basic economic reasoning tells us that inflation accelerates whenever nominal wages rise faster than productivity. It is also well known that inflation hits the poor the hardest. Paradoxically, the delinking of rural wages from productivity acted as an incentive for farmers to replace men with machines.

Rural India is once again in the grip of immense distress. As B.R. Ambedkar pointed out nearly a hundred years ago, the real solution to rural distress is to be found in rapid industrialization as well as urbanization. The entitlements strategy of the United Progressive Alliance was supposed to provide a permanent cure to the sort of rural distress that India is currently battling. MGNREGA should be judged in terms of what it set out to do rather than its unintended consequences.

Has MGNREGA achieved its policy goal in the past 10 years? 

MSP for Copra for 2016 season

MSP for Copra for 2016 season

The Cabinet Committee on Economic Affairs, chaired by the Prime Minister Shri Narendra Modi, has given its approval for the Minimum Support Prices (MSPs) for Copra for 2016 season. The decision is based on recommendations of Commission for Agricultural Costs and Prices (CACP). CACP, which is an expert body, takes into account the cost of production, overall demand-supply, domestic and international prices, cost of conversion of copra into coconut oil, the likely effect of the Price Policy on the rest of economy, besides ensuring rational utilization of production resources like land and water, while recommending MSPs.

The Minimum Support Price (MSP) for Fair Average Quality (FAQ) of “Milling Copra” has been increased to Rs.5950/- per quintal for 2016 season from Rs. 5550/- per quintal in 2015. Also, the MSP for FAQ of “Ball Copra” has been increased to Rs.6240/- per quintal for 2016 season from Rs. 5830/- per quintal in 2015. The MSP of Copra is expected to ensure appropriate minimum prices to the farmers and step up investment in Coconut cultivation and thereby production and productivity in the country.

The National Agricultural Cooperative Marketing Federation of India Limited (NAFED) and National Cooperative Consumer Federation of India Limited (NCCF) would continue to act as Central Nodal Agencies to undertake price support operations at the Minimum Support Prices in the Coconut growing states.

Besides increase in Minimum Support Prices (MSP) for Copra, Government has taken several other farmer friendly initiatives over the last one year. These, inter-alia, include the following:

A new crop Insurance scheme for farmers’ welfare, namely, the ‘Pradhan Mantri Fasal Bima Yojana’ has been introduced under the scheme, there will be a uniform premium of only 2% to be paid by farmers for all Kharif crops and 1.5% for all Rabi crops. In case of annual commercial and horticultural crops, the premium to be paid by farmers will be only 5%.There is no upper limit on Government subsidy.

Government has also created portal on crops insurance in order to keep farmers better informed.

A Scheme to issue Soil Health Card to every farmer has been introduced. Soil health management in the country is being promoted through setting up of soil & fertilizer testing laboratories and implementation of organic f Government has also framed guidelines under Paramparagat Krishi Vikas Yojna (PKVY) to promote organic farming and develop potential market for organic products.

The Pradhan Mantri Krishi Sinchai Yojana, has been launched with the objective of creating sources of assured irrigation.

A dedicated Kisan Channel has been started by the Doordarshan to address various issues concerning farmers.

An initiative is being taken to set up a National Agriculture Market (NAM). This would enable farmers to overcome the impediments in marketing of agricultural produce and get better price discovery. A common e-market platform is being created and would be provided free of cost to the States/UTs that undertake to introduce a single license for trading in the whole state, a single point levy of market fee and permit e-trading Government is also encouraging formation of Farmer Producer Organisations. 

“Counter-Terrorism Conference-2016”

Address by the President of India, Shri Pranab Mukherjee on the Occasion of inauguration of the “Counter-Terrorism Conference-2016”

1.         I am delighted to be amidst you this evening at the inauguration of the 2nd edition of the Counter-Terrorism Conference organised by the India Foundation in collaboration with Government of Rajasthan. It is heartening to note that this conference has brought together field operatives, senior officials from security agencies, policy makers, scholars and government leaders involved in counter-terrorism operations, planning and sensitization to discuss ways of tackling global terror outfits.

2.         Peace is the primary objective of rational consciousness as well as a moral universe. It is the foundation of civilization and a necessity for economic success. And yet, we have never been able to answer a simple question: why does peace remain so elusive? Why has peace been so much more difficult to attain than conflict? These are the questions we need to ponder upon, both as a civilization and as a society.

Ladies and Gentlemen,

3.         As the twentieth century closed down with a remarkable revolution in science and technology, we had some reason for optimism in the direction of peace and prosperity. That optimism has faded in the first fifteen years of this century. There is unprecedented turbulence across vast regions, with alarming increase in regional instabilities. The scourge of terrorism has reshaped war into its most barbaric manifestation. No corner in the world is now safe from this savage monster. 

4.         Terrorism is inspired by insane objectives, motivated by bottomless depths of hatred, instigated by puppeteers who have invested heavily in havoc through the mass murder of innocents. This is war beyond any doctrine, a cancer which must be operated out with a firm scalpel. There is no good or bad terrorism; it is pure evil. 

5.         Terrorism is undoubtedly the single gravest threat that humanity is facing today. Whether in Paris or Pathankot, terrorist attacks on democracies are attacks against fundamental values of liberty, freedom and universal brotherhood. Terrorism is a global threat which poses an unprecedented challenge to all nations. No cause can justify terrorist acts. It is imperative that the world acts in unison against terrorism, without political considerations. Therefore, there is a need to take a resolve to not justify terrorist means whatever be the reason or the source. 

6.         Till the end of the 20^th century, terrorism had regional or national connotations. With the emergence of first Al-Qaeda and now IS, those boundaries have shattered. Non-state actors are trying to be the State themselves, spreading radical ideologies across societies, using technologies to the fullest extent to attract youth. In such a scenario mere political and military strategies will not suffice. We need to take social, economic, religious and psychological aspects into consideration. 

Ladies and Gentlemen,

7.         In the history of terrorism, the terrorist attack on the United States on September 11, 2001, is certainly a watershed moment. That moment defines the genesis of modern-day counter terrorism in the international context. From that single incident have flowed most of the interventions in the counter-terrorism sphere that we   see happening at the international level as also at the regional and domestic levels. Faced with the spectre of terrorism, the Western world has undertaken a lot in terms of strategy and tactics and has achieved results also. We need to carefully examine and learn lessons from the success and failure of these strategies.

8.         We may, at the same time, do well to remember that South Asia has been facing terrorist violence since decades in various forms. There is a peculiar nature to this terrorism. To counter that, South Asian countries, including India, have developed certain capabilities. We need to similarly discuss and deliberate on the effectiveness of these strategies and how these have impacted on our counter – terrorism capabilities.

9.         An important aspect of counter-terrorism strategy is capacity building to prevent attacks through intelligence collection and collation, development of technological capabilities, raising of Special Forces and enactment of special laws. Though we have evolved certain mechanisms in this direction, there is scope for further intensifying these efforts.

10.       Counter terrorism is generally considered to be about tactics, weapons, force levels and intelligence gathering. While these things are important the predominant focus has to be on the political management of terrorism.  This includes addressing issues of ideology and dealing with countries that sponsor or support terrorism. It is imperative that the world in one voice  rejects all manifestations of terrorism, without distinction, and proscribes States that support or sponsor terrorism as an instrument of State policy.

11.       We cannot also forget the fact that civil society is both the frontier and the battleground which has to be protected and saved. Fragmentation of civil society, rather than its consolidation, is not a wise strategy. The former course leads to radicalization, which thereafter leads to competitive violence. Think tanks and civil society organizations have a larger role to play in this process of social integration. A pluralistic and inclusive society like India has long presented a model for multi-cultural living. It is for this reason that global terror outfits have not been able to find traction in India.  We have, as a nation, to strengthen that plurality so that it acts as a bulwark against radical ideologies and thought processes.

Ladies and Gentlemen,

12.       These aspects highlight the fact that there is a need for comprehensive strategies and greater international cooperation to ward off future threats. Our counter-terrorism effort has to be more pointed, more focused, more objective and more professional. While doing so there will always be a dilemma of whether we are threatening individual liberties or human rights. We have, therefore, to be judicious in protecting larger freedoms and democratic values. We need to fight this scourge at all levels- through shaping of public opinion, society building and evolving a concerted and integrated counter- terrorism policy premised on international cooperation in intelligence sharing. Needless to say, it also entails taking concerted action to shut down the financial networks that support and sustain terrorism.

13.       I am confident that this conference shall deliberate on the challenges posed by global terror outfits, and examine the possibility of sharing capabilities with a view to combating larger dimensions of this threat.  With these few words, I conclude. I wish you and the deliberations of the Conference all success. 

India Signs an Agreement to Become an Associate Member State of European Molecular Biology Organisation

India Signs an Agreement to Become an Associate Member State of European Molecular Biology Organisation

India through the Department of Biotechnology, Ministry of Science and Technology signed a Cooperation Agreement to acquire the status of the Associate Member State European Molecular Biology Organisation (EMBO).  This would strengthen scientific interaction and collaborative research between India and Europe in this field. After the signing of an agreement with Singapore by EMBC in July 2015, India will now become second such country outside the European region.

EMBO is an organization of more than 1700 leading researchers that promotes excellence in the life sciences. The major goals of the organization are to support talented researchers at all stages of their careers, stimulate the exchange of scientific information. The movement was started in 1964 as European Molecular Biology Conference (EMBC) and subsequently it got intergovernmental funding.  More information on the organisation is at www.embo.org

With this India as an EMBC Associate Member State, researchers working in India are now eligible to participate in all EMBO programmes and activities. Indian scientists can apply to EMBO’s programmes, such as long-term fellowships for postdoctoral researchers, short-term fellowships, courses and workshops, as well as the EMBO Young Investigator Programme. At the same time, Europe will benefit from networking with the top-level scientists in India’s research community.

The official kick-off launch ceremony of the agreement was held in New Delhi, India today (4 February 2016). Scientific presentations were made by Nobel Laureates Christiane Nüsslein-Volhard and Ada E. Yonath to mark the occasion.

To mark the occasion, Professor Maria Leptin, Director of EMBO said - “For the past five years, we have been promoting international interactions beyond Europe, and India is one of our prime partners. I am extremely pleased that India is going to be an Associate Member of EMBC and I look forward to India being able to access EMBO activities. Many European researchers have established scientific connections in India. No doubt these will be strengthened further once more tools and formal opportunities for interactions are available.”

Professor K. Vijay Raghavan, Secretary of the Department of Biotechnology (DBT) for the Government of India, who signed the agreement: “India is rapidly growing into a position where we are making extraordinary demands on ourselves. India can only succeed if we partner with the best everywhere to bring the best here.” He added: “Through EMBO, we will not only have the excellent joint programmes that benefit India and Europe, but we hope to be a magnet that attracts bright young people to science from in- and outside India.” 

Professor Gerrit van Meer, President of the EMBC, remarked: “All member states welcome the exchange with Indian scientists that this agreement will bring. We look forward to seeing transcontinental projects spanning India and Europe grow in future.”

An EMBO-led delegation of ten researchers is in India now to visit various institutes across the country and meet with Indian scientists and government representatives.

This newly forged cooperation will build upon already existing links between Indian and European scientists. In 2015, 10 Indian postdoctoral researchers received an EMBO Long-Term Fellowship to work in Europe and eight India-based scientists received the EMBO Short-Term Fellowship. A satellite symposium focusing on research in India has been an integral part of the annual conference The EMBO Meeting.

Dr. Harsh Vardhan Visits the National Centre for Cell Science

Dr. Harsh Vardhan Visits the National Centre for Cell Science

Dr. Harsh Vardhan, Union Minister for Science & Technology and Earth Sciences, visited the National Centre for Cell Science (NCCS), an autonomous institute funded by the Department of Biotechnology (DBT), Government of India, on 3rd February, 2016. He was accompanied by Shri Jayant Sahasrabuddhe, National Organising Secretary, Vijnanabharati. Dr. Arvind Duggal, Adviser, DBT, was also present on this occasion.

The Minister toured the Microbial Culture Collection (MCC), the third largest facility of such a kind in the world. While acknowledging the expanded efforts made by MCC in exploring and preserving the rich microbial biodiversity of India, he stated that that the facility should carry out more focussed research in one or two areas.

Dr. Harsh Vardhan asked for a comprehensive plan to be presented to DBT and the Ministry of Science and Technology, outlining a road map for carrying out such focused research and for sharing the cutting-edge facilities available at MCC. The Director of NCCS, Dr. Shekhar Mande briefed the Minister about the several contributions made by NCCS in the national
interest and some of the new initiatives planned such as establishing an induced pluripotent stem cells (iPSC) bank, development of patient-derived cell lines from the Indian  population and mapping of the human gut micro-biome of the Indian population.

The Minister noted that since its inception in1988, NCCS has been at the forefront of cutting-edge research indiverseareas of modern cell biology, especially those addressing paramount issues
related to human health, such as cancer, diabetes and other metabolic diseases, infectious diseases and regenerative medicine. He was especially pleased to learn that NCCS has not only been actively engaged in productive basic research, but has also been contributing towards the betterment of society through other means, such as by generating high-quality human resources through its educational and training programmes, transferring its technologies to public hospitals and through outreach activities.

Dr. Harsh Vardhan later visited some of the laboratories of NCCS and the animal cell repository of NCCS, where he interacted with the scientists, students and staff. During his visit to this national facility, he acknowledged the enormity of the task of supplying cell lines to many institutions across the country.

Engaging Myanmar as it moves to democracy

Economic and strategic imperatives both demand building close ties

Last year, Burmese political icon and Nobel laureate Aung San Suu Kyi told an Indian television network: “If the National League for Democracy (NLD) wins the elections and we form the government, I am going to be the leader of that government, whether or not I am president.” On Monday, she stood on the cusp of fulfilling that promise with the historic inauguration of Myanmar’s first civilian-dominated parliament in half-a-century. The process of Myanmar’s political transformation that started—hesitantly—with 2010’s allegedly managed elections and gathered steam with more convincing elections in November last year is now well underway.

Reportedly, Suu Kyi has avoided triumphalism in the wake of the NLD’s convincing victory. She has good reason. Multiple challenges await her. Pushing towards a resolution of ethnic conflicts is one. For another, she may soon hold power through a proxy president, but the military junta that ruled Myanmar from 1962 to 2010—and continued to dominate the political landscape during the subsequent nominally civilian dispensation headed by former general Thein Sein—will not be returning to the barracks anytime soon. The NLD’s overwhelming majority of about 80% of the elected seats in the legislature will be offset in part by the 25% block of both parliaments reserved for the military and the military’s continued hold on ministries like defence, home affairs and border affairs.

The NLD consequently finds itself in the unenviable position of needing to deliver strongly on the promise of democratic rule in order to maintain public support and buttress itself against military interference—while being constrained by the military’s continued political role. That means sustaining the promising 8.5% economic growth of 2014-15 when Myanmar’s July floods have led the World Bank to forecast a moderation to 6.5% for 2015-16.

That makes the potential of India-Myanmar economic links all the more important. Unsurprisingly, despite easing ties with the military junta in 1993—an admirable display of pragmatism—New Delhi has failed to invest the required political will and energy in the relationship. ONGC Videsh Ltd and GAIL (India) Ltd both have stakes in Myanmar’s Shwe offshore gas field and India has invested in English-language training, agriculture and the IT sector. But China, accounting for 42% of the over $33 billion of foreign investment in Myanmar between 1988 and 2013, is leagues ahead. It has bankrolled a host of infrastructure projects from oil and gas pipelines—strategically important for Beijing, allowing it to ship oil straight from the Indian Ocean, bypassing the Strait of Malacca choke point—to ports and dams.

But with that investment has come a popular backlash within Myanmar. The Chinese model of economic engagement is seen as exploitative; land confiscation, forced relocation and cross-border influx of cheap goods and labour have all made China unpopular. The opening up of Myanmar as sanctions were eased and border incidents have also led to a cooling of relations between Beijing and Myanmar’s generals—its strongest backers—over the past few years.

That and the new administration now in place in Naypyidaw mean this is New Delhi’s best chance yet to begin rectifying its past lack of initiative. Its Look/Act East policies, carried across administrations since the 1990s, all but demand it—Myanmar is the gateway to South-east Asia. The capacity and institution building it has done so far, along with cultural links, mean it enjoys a positive perception across the border. That advantage must be exploited with infrastructure initiatives that benefit the Burmese people—such as the India-Myanmar-Thailand highway, bus and rail links, the Bangladesh-China-India-Myanmar Economic Corridor and power transmission lines—alongside energy sector investment.

The economic and strategic benefits of such investment—the two are intertwined—extend to boosting development in India’s North-east and cooperation with Myanmar in combating insurgent groups operating in the region. The cross-border raid in June last year targeting the Khaplang faction of the Nationalist Socialist Council of Nagaland and the Kanglei Yawol Kanna Lup is a case in point.

Naypyidaw will seek to extract all it can from the relationship and play Beijing against New Delhi for best advantage, of course. Suu Kyi’s visit to the former last year and her public statements about Myanmar serving as a bridge between China and India indicate as much. It’s time New Delhi upped its game.

Can India overcome China’s advantage in Myanmar? 

A decade of MGNREGA

The relevance of MGNREGA in rural areas goes beyond its success in creating public employment and its impact on wages

This week, the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) completes a decade of existence. The Act came into force on 2 February 2006 covering only the 200 poorest districts of the country and was expanded to cover all rural areas of the country from April 2008. This is the largest programme of its nature for providing employment in rural areas anywhere in the world.

In the short span of 10 years that the Act has been in existence, it has generated 19.86 billion person-days of employment benefitting 276 million workers, with more than half the jobs going to women workers and almost a third to members of scheduled castes and scheduled tribes. These numbers are staggering by themselves but what is relatively less known is the impact of MGNREGA on several other aspects of the rural economy, such as wages, agricultural productivity and gender empowerment. While most critics lament the quality of assets created under MGNREGA, there is now increasing evidence based on rigorous studies, which suggest that not only has the asset quality been better than comparable government programmes, they are also used more by the community. An anthology of research studies on MGNREGA (MGNREGA Sameeksha) was brought out by the United Progressive Alliance (UPA) government in 2012 and a follow-up by the current government last year.

However, a proper evaluation of the impact of MGNREGA has to go beyond the standard metrics of programme evaluation. The achievements of the programme in terms of its impact on rural demand, political participation, women’s empowerment and improvement in rural infrastructure are hard to quantify, but are visible to anyone who has been tracking developments in rural India. And it is these that have been crucial in sustaining the demand for the programme, despite efforts to downsize it. While these were important drivers of the buoyancy in rural economy during the UPA regime, MGNREGA has emerged as an important intervention by the current National Democratic Alliance government during a period of severe distress in the rural economy.

However, the improvement in performance of the MGNREGA in the latter half of last year has come too late. Even with the improvements, the current year’s performance indicators are much less than the performance of the programme in 2009-10 or in 2010-11. The UPA, which to its credit legislated the Act, has also been responsible for the programme losing steam after 2010. Not only was there a cutback in funds available for MGNREGA, there were attempts to change the nature of the programme from essentially demand-driven to supply-driven.

The result was a sharp decline in employment generated, which fell from 2.84 billion person-days in 2009-10 to 1.66 billion person-days in 2014-15. This was also the case with the average number of days of employment provided, which fell from 54 person-days per household in 2009-10 to just 40 person-days per household in 2014-15. Whereas seven million households completed 100 days of employment in 2009-10, it was down to only 2.5 million in 2014-15.

This was largely a result of a decline in funds made available to MGNREGA, which fell not only in nominal terms after 2009-10, but also in real terms, by more than half by 2013-14 compared with the peak years of 2009-10. This happened at a time when the wage rates in rural areas were increasing at more than 5% per annum since 2009-10. To add to the problems, the administrative reforms in MGNREGA were designed to keep the poor and vulnerable out of the programme, with insistence on technological quick-fixes. The net result of these financial and administrative measures was a decline in participation in the programme, a classic case of discouraged worker syndrome.

However, the relevance of MGNREGA in rural areas goes beyond its success in creating public employment and its impact on wages. MGNREGA has played a much larger role in revitalizing the labour market in rural areas. Not only has it led to the creation of a class of workers who are using the MGNREGA as a safety net, but these workers are also able to use it as a bargaining tool for extraction of higher wages. There is consensus that it did play a role in the acceleration in wage rate growth after 2008, directly through upward pressure on wages and tightening of the supply of casual labour to the market and indirectly through the pressure on the state governments to increase minimum wages. Although to a lesser extent, there is also evidence that it did lead to a slowdown in rural-urban migration along with contributing to an increase in agricultural productivity through the creation of rural infrastructure.

While the attempt of the current government to revive the MGNREGA is welcome, it is difficult to attribute it to any change in perception towards the scheme. Not only have the last two budgets of the NDA government failed to increase the budget for MGNREGA, there was hardly any effort to address the issues of delay in wage payments or improving the financial flow to the lowest functionaries until late last year. However, better late than never. The rebound in demand for work from MGNREGA is a clear indicator of the need of MGNREGA. More so in a situation of rural distress, where the rural economy has not only suffered back-to-back droughts but the decline in agricultural commodity prices has led to declining agricultural incomes. The fact that wages in rural areas have been stagnant in real terms since November 2013 has also contributed to the rural distress. Given the severe stress in the rural economy, reviving MGNREGA will not only require strengthening the administrative structure of the programme but also financial support to make it truly demand-based. This budget is not just an opportunity to reverse the years of neglect by financial infusion in MGNREGA, it may also be the only opportunity to revive the rural economy.