Left's not the problem

The coming weeks will determine who the UPA's greater problem is, the Left parties or the UPA Chairperson's National Advisory Council (NAC). For while the Left's only demand seems to be restricted to not selling BHEL shares, and to not privatising PSUs which the government doesn't want to anyway, the NAC's demands will bankrupt the government, and ironically without even helping the poor for whom all of this is being done.

Apart from the social security bill for unorganised sector workers which will cost upwards of Rs 35,000 crore a year and is infeasible to operate as we argued in this space yesterday, Sonia Gandhi has once again reiterated the old NAC demand that the Rural Employment Guarantee Bill be extended to all rural families and not just to the poor.

The argument is that since the work offered is menial, only the really poor will opt for it. This however is wishful thinking since, as yesterday's story on the front page of this paper showed, very few people in even the Sampoorna Grameen Rozgar Yojana scheme for the poor get the statutory minimum wage, and indeed wage levels change depending upon even the caste and the sex of workers.

In which case, the guarantee of a minimum wage will ensure that every rural family will opt for the scheme. In any case, there is no mechanism to ensure these workers do not have access to 100 days of work elsewhere, though the scheme is really meant for those who have no other access to employment.

That would result in the cost of the scheme going up from the Rs 40,000 crore talked of to around Rs 150,000 crore, a figure that's a fourth higher than the entire excise duty collections projected for the year, and seven times the annual plan outlay on agriculture, irrigation and rural development today! And, given the problems of huge leakages associated with every subsidy scheme, there's no reason to suspect the employment programme will be any more successful in ensuring the benefits percolate to those it is meant for.

This apart, Sonia Gandhi has also demanded that the bill that is to be introduced in Parliament is changed in a few other critical places. For one, she says, the bill must be fully funded by the Centre, which will ensure the states have very little interest in ensuring the scheme works properly.

Indeed, the main reason for schemes failing in the past has been the lack of appropriate financial commitment from the states. Gandhi has also demanded (and when the party chief makes a suggestion, it practically amounts to a demand ) that unlike other schemes of the government, it should not be possible to withdraw this scheme whenever the authorities so desire.

In other words, the cheque book should be kept open for as long as is needed. So far, it must be said, the Manmohan Singh government has successfully warded off the most fiscally imprudent suggestions "" the original proposal of the NAC was to open up guaranteed employment to everyone, but the government decided to intensify the existing food for work programme instead in its first budget. Even now, the bill sticks to the old jobs-guarantee-only-for-the-poor line. It remains to be seen how long it holds out.