India's jobs plan goes nationwide

Last week, India's government expanded its ambitious program to provide 100 days of minimum-wage employment per year to millions of poor rural farmers.

Every summer, when the scorching sun turned the fields in the desert state of Rajasthan to arid sheets of dust, laborer Saphi Rabari would migrate to the neighboring state of Madhya Pradesh, where she used to work as a goat herder. Because she took her two young sons with her, there was little point enrolling them in school in either place.

For the past year, however, Ms. Rabari has worked at a government-funded project, building a flood defense wall outside a village in Jalor, a district in southern Rajasthan. The work pays her 100 rupees ($2.50) per day, compared with the 50 rupees ($1.25) she earned herding goats.

Her sons are now at school.

"I won't migrate again," says Rabari, speaking through the scarlet sari that shields her face from the dust, as she shovels dry earth into a metal pannier and places it on her head. "We have what we need here."

Rabari's job is part of the government's National Rural Employment Guarantee Scheme (NREGS), which aims to provide 100 days of minimum wage employment – 60 rupees a day – each year to tens of millions of rural poor in public works like ditch-digging.

India's biggest poverty program

Last week, the program was expanded to the entire country, making it India's most ambitious project to tackle poverty ever – and "one of the most ambitious development programs in the world," according to Professor Jean Drèze, a development economist and one of the program's architects.

The widening of the scheme, for which the government has pledged $4 billion this year, was announced in February's budget, along with a $15 billion loan waiver for small farmers.

Both are designed to tackle one of the greatest challenges facing India: the exodus of poor rural residents into the cities.

By 2030, India's urban population is expected to have swelled from 285 million to 575 million – an increase roughly equal to the US population.

That challenge has become more pressing than ever as poor Indians struggle to cope with rocketing food prices. As inflation here has climbed to 7 percent, prices of rice – a staple in India – have surged more than 20 percent.

The NREGS, launched in 2006, was introduced across half of India's 604 districts by the end of last year.

It gave employment to 30 million families for 43 days on average, according to official figures.

In January, an independent audit agency slammed the program, saying it had "significant deficiencies," from financial mismanagement to a lack of trained manpower.

One of the problems, say critics, is that 60 percent of the money has to be spent on unskilled labor.

This, they say, leaves too little cash for skilled labor or materials – making it impossible to create useful productive assets like roads, schools, or health clinics.

Some economists argue that along with the farm loan waiver, the scheme could widen India's large budget deficit and push up interest rates.

But by far the biggest criticism is that the NREGS too closely resembles the innumerable poverty-reduction programs of the past, in which huge sums of money bypassed the intended beneficiaries.

"The government has been doing schemes like this since the 1970s – and this one just collapses them all into one," says Surjit Bhalla, an economist.

"None of them has worked, and nor will this. If you want to help the poor, cash transfers are the only way," he says, referring to poverty alleviation programs that provide cash to families on the condition that they meet specified social goals.

But many believe that the NREGS is different from earlier schemes in important ways, and that, rather than scrapping the project, its implementation should be improved.

Reetika Khera, an economist and representative of the global Right to Food Campaign, says that the NREGS ensures greater transparency than earlier schemes.

An important example of this, she says, is the publication of muster rolls at each work site. Read out each morning, these make it difficult for corrupt officials to make false claims.

Where the scheme succeeds most

She adds that the scheme has been much more of a success in states with better governance. "If politicians get interested, there's more motivation for administrators to make a good job of it," she says.

Rajasthan is a striking example of this. Here, in the last year, almost all the households that demanded it were given an average of 85 days of work.

In Jalor, say experts, the scheme has been a success because of the leadership of the district collector – or top official – Rohit Kumar.

Since Jalor joined the scheme in May last year, Mr. Kumar has introduced several innovations that have contributed to its success.

Traditionally, on Indian work sites, laborers work in large groups and all are paid the same irrespective of their contribution. In Jalor, the groups are much smaller, which has exposed slackers and increased productivity, says Kumar.

In addition, Kumar has introduced a rule that a third of the "mates" – site bosses – must be women.

"To even think of a lady being a mate was unthinkable two years ago." says Kumar. "But the men are beginning to get used to it now."

He says that administrators like him have more reason to ensure that this scheme is a success because, unlike previous projects, it is enshrined in a law – the National Rural Employment Guarantee Act (NREGA), which was passed in 2005.

Khera says that despite the naysaying of critics, it is too early to judge the overall success of the scheme.

Jalor, at least, stands as an example of how a public works project can improve lives.

Rajesh Harijan's particular status within the dalit caste – the group at the bottom of the Hindu caste system formerly known as untouchables – meant he was the sweeper in his village, a job that paid in bread rather than cash.

But today, he works at the flood defense site, breaking the hard earth with a pickaxe and earning his first ever salary. "I'm getting money and I'm getting respect," he says.