NREGA under the microscope: Why progressive laws produce bizarre results

Ever since it was passed in 2005, the National Rural Employment Guarantee Act – which guarantees rural households 100 days of work a year – has generated intense debate. But the terms of the debate read much like the ones we recently heard in the European Union referendum in Britain: In or Out. Either you are for NREGA (“remain”) or you are against it (“leave”). Furthermore, the debate is almost always structured along the central concern of whether it works or it doesn’t. However, as I discovered when I spent 18 months over 2006-'08 following the implementation of the scheme, NREGA’s effects are much more complex.

The polarisation, I realised, is not just a product of ideological differences but also because the debate has relied almost exclusively on surveys, official data, or anecdotes. To try to overcome this, I decided to conduct a long-term participant-observation project in various government offices in Uttarakhand. This immersion in bureaucratic life and view of the State from within led me to rethink both implementation of NREGA and the manner in which State success and failure is computed.

That research made its way into my recently published book, Paper Tiger, in which I attempt to demonstrate how and why progressive laws and sophisticated plans fail or produce bizarre results.

I chose to base my research in a district in Uttarakhand due to its high levels of poverty, distress out-migration, and unemployment. This district is featured on the erstwhile Planning Commission’s list of 200 most backward districts, as a result of which NREGA had been made operational there in its very first phase from 2006 onwards.

To my utter surprise and disappointment, I failed to find much presence of NREGA in the villages. It was prominent by its absence. Bureaucrats and panchayat members described it to me as an unimplementable scheme. They described it as yet another programme dreamed up by people working out of air-conditioned offices in Delhi without thought to the form and extent of labour involved in implementing it. There was a constant bemoaning of the paperwork that NREGA had unleashed on them as I observed all the officials slowly disappear behind mounds of rising files. Villagers, activists, and the media, on the other hand, blamed the crisis of implementation and the limited uptake on corruption or the propensity of the State to “eat money” (paisa khana), as the popular metaphor goes.

Eating money

Despite these popular claims of corruption in NREGA, I slowly discovered that this statute had, in fact, greatly reduced leakages. It was not corruption that was making NREGA unimplementable but, rather, the fact that the scheme actually guaranteed greater transparency. Like its sister legislation, the Right to Information Act, NREGA aims to render the functioning of the state transparent and, thus, make it more accountable. The transparency and accountability clauses have directly increased the paperwork of the local state as it needs to exhibit that it is following procedure and rules. It was only through the production, circulation, and exhibition of new documents that the state can have said to have made its functioning transparent. In addition to the exponential increase in the sheer volume of paperwork required, the new documentary compulsions introduced by NREGA were interfering with the patterns of corruption that traditionally undermined public works programmes in India.

Referred to colloquially as the Contractor Raj, this is a mode of operation in which a private contractor oversees the execution of public works and rural employment schemes. The contractor gets this overseer position by giving a cut or a percentage of the total value of the project to state officials. The precise cut the bureaucrat gets is directly commensurate with his rank and position in the state hierarchy. The contractor, who then employs the labourers and oversees the construction work, makes his own profit by doctoring accounts, controlling kaccha muster rolls, underpaying the labourers, using substandard material, and through other creative accounting practices.

Canny Documents and IDs

The astute design of the NREGA interrupted this system, with the result that the law struggled to take off in Uttarakhand. In direct recognition of the Contractor Raj, NREGA makes the employment of contractors in execution of works a legally punishable offence. This has been coupled with the introduction of new documents designed to remedy the ease with which books could be fixed hitherto. Most important in these new documents was the introduction of a new ID card called the job card. The fundamental purpose of the job card is to allow the labourer to verify what the state claims it has officially paid her. It is supposed to carry all details of days worked and wages paid to every rural household. Entries in job cards are read against the official muster rolls to check for any discrepancies in accounts. All monitoring of the NREGA at the village level is focused upon scrutiny of job cards.

In effect, NREGA has created a stringent system of double accounting: one involving not only a large number of mutually corresponding documents that different state actors are required to produce but also, crucially, a document – the job card – that centrally attests to the truth of the scheme and resides outside the domain of the state, in the hands of the labourer. Contractors and even panchayat functionaries were not keen to pick up works under the NREGA, and having ample alternatives, chose to avoid this programme, at least temporarily. In consequence, the entire public works system came to a grinding halt.

Ironically, then, it wasn’t corruption that was creating a crisis of implementation in Uttarakhand over 2006-'08 but, rather, the demands for transparency and accountability. This case study of NREGA serves as a cautionary tale against the tendency to immediately pin blame for the failure of welfare programmes on corruption. Furthermore, it is a demonstration of the unintended consequences of good intentions. Most importantly, it forces the uncomfortable realisation that while the recent push for transparency has the ability to limit corruption, it does not automatically and in and of itself translate into a revolution in service delivery by the government.

Nayanika Mathur is the author of Paper Tiger: Law, Bureaucracy and the Developmental State in Himalayan India (Cambridge University Press).