CAG report on NREGA: Quixotic media prevaricated the positive outcomes

Sunday, July 6, 2008

The Nationa Rural Employment Gaurantee Scheme (NREGS) has been touted as the largest ever public employment program visualized in human history (Shah, et al: 2008). Independent India has (arguably) seen unprecedented innovations in the policy 'formulation' for socio economic development. Some of the policies and programs could taste the sweet of success but (again, arguably) most of them failed to 'change the lives around'. Checks and balances are vital for taking forward the policy to achieve its intended goals. In this context, Ministry of Rural Development (MoRD) had asked Comptroller and Auditor General (CAG) of India to undertake the performance audit of NREGS. This proactive step taken by MoRD is commendable, even courageous. Recently, media has virtually sensationalized the reports of CAG on NREGS. Media even went on to say that NREGS is a failure and should be abandoned!" What did the CAG actually say? Where did the CAG fall short of its investigations? And what can we learn from the CAG to improve the functioning of the NREGA? [EPW, June 21, 2008]"

Need a quick look at NREGA? have a glance here.

Indian media focused on two important aspects of CAG report [CNN-IBN, ET, Indian Express, and other print and electronic media],
  1. Each 'registered household' received only 18 days of employment on average, where as the actual promise was 100 days of employment under NREGS.
  2. Only 3.2% of 'registered households' worked for full 100 days. That means around 97% of households in India did not receive the 100 days of employment.
Immediately after media sensationalized the CAG report, MoRD hit back saying that,
  1. Each 'household' actually recieved 44 days of employment on average.
  2. 10% of 'households' got 100 days of employment.
It is very interesting to note that both CAG report and MoRD reports are derived from the same source! i.e. from Official Monthly Progress Reports ('Circulars and documents issued by the MoRD' as mentioned in CAG report). So how did CAG and MoRD arrive at two different numbers from the same data? CAG report took "Registered Households" as the reference group, while the MoRD's calculations focus on "households" employed under NREGA.                       
So what's the difference between 'registered households' and (just) 'households' employed under NREGA? The fact is that, CAG's 'registered household' approach does not capture the demand-driven aspect of the NREGA Act. Any rural household - whetner or not it subsequently seeks employment - can get a job card through registration. Registration is simply an expression of potential interest in applying for employment. Official  monthly progress reports suggest that, the proportion of registered households that have actually worked at NREGA worksites is around 55 percent [EPW, June 21, 2008]. That means, atleast 45% of the households that recieved employment under NREGA have not registered. Its very clear that, CAG has ignored this 45% of unregistered households which actually recieved employment! The unregistered household information in various states can be found in CAG report itself! click here to see this in CAG report. What happened next? Media was quixotic enough to ignore such a vital information provided in the CAG itself and went on to change the facts into fiction. This untimately created hatred feeling about implentation of visionary policy like NREGS.

Other myths in CAG report and realities
  1. CAG reports "Worksite facilities were not provided in 202 Gram Panchayats (GPs) in AndhraPradesh, Assam, Chhattisgarh, Gujarat, Haryana, Himachal Pradesh, Jammu & Kashmir, Jharkhand, Karnataka, Manipur, Orissa, Rajasthan, Uttar Pradesh, Uttarakhand and West Bengal (15 States)." If even one of these facilities in one of the Gram Panchayats of any of these 15 states was found to be missing, this state would have joined the list. As a result, this statement tells us precious little about the actual state of things. Such an approach can only yield a partial if not distorted view of the implementation [CAG Report and EPW].
  2. Media reported (based on CAG report) that, there were widespread finantial irregularities in implementaiton of NREGS. Economic and Political Weekly reported that (June 21, 2008 issue), "CAG report does not mention specific cases from which corruption can be inferred. In contrast to the presentaiton in the media, a careful examination of such instances (finantial irregularities) does not lead to a picture of widespread corruption!"
  3. CAG also reported that there were attempts to tamper the muster rolls (i.e. list of citizen eligible for employment under NREGS). CAG provides no numbers by which we can guage the extent of the fraud!
  4. Find out more at The Hindu.
Where CAG Report has failed?
  1. The report has little to say about actual socio-economic outcomes, whether it is the impact of NREGA on poverty, or on women's empowerment, or agricultural productivity.
  2. There is a scattered evidence from many sources that NREGA is empowering women, encouraging rural savings, helping with schooling, activating Panchayat Raj Instirutions, etc. CAG has failed to investigate these aspects.
  3. CAG has completely ignored many state schemes initiated under the NREGA. (Note that, States have the responsibility of implementing NREGA and have given significant freedom to choose thier schemes in accordance with Operational guidelines mentione in NREGA).
  4. CAG has choosen to use either national averages of employment generated, or existing poverty lines to decide the impact of NREGA. These figures of average employment generated and existing poverty line are extremely complex and their figures vary from region to region. So using these figures might at best serve as a rough guide but not the actual scenario.
Most of the mainstream print and electronic media failed to understand these ground realities and went on to create a hatred feeling about one of the best policies India has ever produced. Its very interesting to note that only "The Hindu" was knowledgable enough to dig out these ground realities. True to its reputation, The Hindu tried to find the positive outcomes of CAG report rather than creating unhealthy speculations like other media fraternity. Are there some positive outcomes in CAG report? Yes.
  1. CAG has convincingly reported the issue of shortage of staff to implement NREGA.
  2. CAG has highlighted the importance of social audit process and recomended that social audit must be taken far more seriously by the administration.
  3. Mismanagement in job card distribution and wage distribution is highlighted well, and government should act quickly to overcome these shortcomings.
  4. The relactance of state governments to disburse unemployment allowance has been noted appropriately.
Well, The CAG report "is a mix of constructive elements interspersed with facts that can be misrepresented. Nevertheless, CAG report is an independent look at the NREGA that can be extremely useful. It is imperative that government should respond constructively to the report rather than simply discard it or dismiss it as false." Mean while, media should understand its social responsibility in a democratic society and should stop spreading such unhealthy speculations which sidelines the positive effects of visionary policies like NREGS.

References and Notes
  1. CAG Draft Report on NREGA.
  2. Economic and Political Weekly, June 21, 2008 issue. Article titled, 'CAG report on NREGA: Facts and Fiction' by Siddhartha and Anish Vanaik.
  3. Misleading media reports: CNN-IBN, ET, Headlines India, Indian Express: 1, 2, 3, 4. Indian Express even went on to say that, "It's official: In poorest states, job funds don't reach the poor", "Congress ka haath kiske saath!"
  4. Unbiased report in The Hindu.
  5. NREGA portal.
  6. CAG portal.

1 comment:

Ishteyaque said...

Dear Manjunath,
NREGA has been touted as the "largest ever public employment program visualized in human history". This "Largest ever ..." spent only Rs. 12074 crore to benefit at least 50% of the country's population and finally reaching to only 2.1 crore households. And the government has spent over 1,85,000 crores on the banks, leaving aside the 70,000 crores for the settlements of farm credits which finally helped the Indian banking system. 12000 crore for the 50% of population and ocwe 2,50,000 crores for ...?
Priorities are very clear. And the media has nothing to complain. Though there was a great hue and cry when the farmers' loans were waived in the media, not a single voice is heard against this kind of anarchic decisions.

In its performance audit report on implementation of the NREGA the CAG noted that of the Rs.12,074 crore funds, including the States’ share of Rs.813 crore up to March 2007, the State governments could utilise Rs.8,823 crore.

It held that the NREGA being a Central law, the Ministry of Rural Development should accept the overall responsibility for coordinating and monitoring its administration and ensuring economical, efficient and effective utilisation of funds provided by the Union government. The Act initially came into force in 200 districts from February 2, 2006.

According to the Ministry, 3.81 crore households had registered under the Act. Of these, 2.12 crore households had demanded employment and 2.10 crore households were provided employment during 2006-07.

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