Draft law proposes job guarantee fund

Programme wages to be paid by centre, dole to be paid by states

The draft National Rural Employment Guarantee Act, 2004, calls for the setting up of non-lapsable Employment Guarantee Funds (EGFs) at the national and state levels and payment of unemployment allowance by state governments in case of failure to provide employment. The cost of the programme is expected to vary between Rs 25,000 crore and Rs 40,000 crore.

The draft also envisages the setting up of Central Employment Guarantee and State Employment Guarantee Councils to review and supervise the implementation of the Act.

In line with the National Common Minimum Programme, the Act aims to provide every rural household with at least 100 days of guaranteed employment every year, wherein at least one adult member will get the opportunity to earn a statutory minimum wage for casual manual labour. It also ensures that wages are received within seven days of the week during which work has been done.

The draft, prepared by noted economist Jean Dreze, was taken up by the National Advisory Council recently. An expert committee will soon be set up to look at it. "The draft Act is very similar to the Maharashtra Employment Guarantee Act, 1976," said Abhijit Sen, member, Planning Commission. "However, the provision requiring payment of minimum wages will push up costs significantly," he added.

The draft says while the wage component of the costs of the employment guarantee programme shall be paid by the Centre from the National Employment Guarantee Fund, the unemployment allowance shall be paid by state governments.

People willing to work will have to register with the gram panchayats, which will issue each household with a job card. State governments will be responsible for providing employment within 15 days of receipt of applications. Efforts will be made to provide employment within a radius of 5 km of the village of residence.

If no employment is provided within 15 days of application, the applicant will be entitled to a daily unemployment allowance, not less than a third of the minimum agricultural wage. No allowance will be paid if the applicant or his household has already received 100 days of employment within the same fiscal.

The liability of the state government will, however, cease as soon as the applicant is directed to report for work or the period for which employment is sought comes to an end or the applicant's household receives 100 days of employment within the same fiscal.