11 Years of NREGA: Surjit Bhalla on the Failure of the Scheme

The Quint asks economist Surjit Bhalla to rate the NREGA, as it completes 11 years.

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As the National Rural Employment Guarantee Act (NREGA) completes eleven years this February, The Quint spoke with economist Surjit Bhalla, who has been a staunch critic of the scheme. The NREGA, a brainchild of the UPA government, was envisaged as a scheme to provide means of livelihood to the rural poor.

What has riled experts are the leakages in the scheme amounting to corruption, with money not making way to the needy. Economists like Jagdish Bhagwati and Arvind Panagariya have described NREGA as “an inefficient instrument of shifting income to the poor” – the general notion being that it takes five rupees to transfer one rupee to NREGA workers.

Not everything is bad about the NREGA though. Some studies, such as one released in August 2015, conducted by the National Council for Applied Economic Research (NCAER) and the University of Maryland have conceded to the anti-poverty impact of the scheme. Positive effects of the NREGA include fall in migration in rural areas, increase in savings and fall in child labour as well as improved learning outcomes of children belonging to NREGA households.

Economists like Surjit Bhalla dispel such notions saying any scheme with 85 percent leakages can’t be proclaimed to be “working successfully”.

Bhalla, who ranks NRGEA as the fourth most corrupt organisation after FIFA, BCCI and FCI (Food Corporation of India), even suggests that schemes such as the NREGA need to be junked.

(This article has been republished from The Quint's archives on the occasion of the 11th anniversary of NREGA. It was first published on 12 February 2016)

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