Cost to limit reach of jobs guarantee Bill

Centre is expected to incur extra expenditure

The government is expected to decide on the coverage of the National Rural Employment Guarantee (NREG) law based on the funds at its disposal.

Senior government officials said that the finance ministry had proposed that 90 per cent of the funds for the scheme be made available by the Centre. The states should chip in with the rest 10 per cent of the requirement.

The government intends to provide at least 100 days of employment in casual manual labour at prescribed wage rates to every poor household in the rural area in 150 backward districts across the country. The scheme for these 150 districts is estimated to cost the government around Rs 9,000 crore annually.

Officials said that the Bill had dropped the original provision to implement the NREG law across the 600 districts in the country as it would entail an expenditure of nearly Rs 30,000 crore. While a part of the funds are to generated by merging schemes like the Sampoorna Gramin Rozgar Yojna, the government is expected to incur an additional expenditure of Rs 5,000-6,000 crore on the new scheme.

Once the provisions of the NREG law are in place, the National Food for Work Programme is to be done away with. The government has set aside Rs 2,020 crore for the National Food for Work Programme, an interim scheme, for the current fiscal year.

Officials said that the government proposed to introduce the NREG Bill next week. The Bill is, however, expected to be referred to a standing committee. The Centre also intends to consult states in the coming days.

A section in the government had raised concerns about the financing of the scheme given the government's commitment to reduce fiscal deficit. Questions had also been raised over the quality of projects that would be taken up and the government's capability to generate employment in such projects.

Those with the contrary view, that the cost will not be very high, cited the example of Maharashtra which has a food-for-work-programme for the last three decades. The cost had remained static according to government estimates.

The scheme in Maharashtra entitles adults to work within a fortnight of registration at block-level offices. A failure to provide employment entitles the applicant to an unemployment allowance.

The draft Bill proposes a minimum unemployment allowance of one-fourth of the prevailing wage rate for the first 30 days during the financial year and at least half the wage rate for the remaining period.

The scope of employment is proposed to include activities relating to water conservation, creation of additional irrigation potential, drought proofing, waste land development, flood control and rural connectivity.