Editor's Note: With the comptroller and auditor general (CAG) pointing out that thousands of crores were spent on creating employment that "didn’t create any regular assets" as part of MNREGS, we go back to one of our stories filed as part of the Governance Now-ANSA SAR project on grassroots reporting. Our reporter, who spent six months in Abu Road block of Rajasthan reporting on the good, bad and ugly of governance in 'other India' that do not often get space in mainstream media, noted exactly what the CAG report has pointed out: digging the ditches, and filling them up again.
And they spend crores on such 'employment'!

You can read other reports from our four ports of call for six months till March 31 here: http://governancenow.com/media-accountability/

Government officials in Sirohi district’s Abu Road block may not have heard of Keynesian theory about the government paying millions of unemployed people to dig ditches and then paying them again to fill up the same ditches in order to keep recession out but they are following it with minor variations here. In  Sirohi, the officials pay crores to the unemployed to dig the same ditches again and again, and year after year.

In Chandela panchayat, for instance, an irrigation ditch/pond has been dug four times; another one in Amthala panchayat thrice; while a third in Moongthala panchayat has been dug up twice so far. And all this non-durable asset-building, yet unproductive, work is being carried out under the UPA government’s much-touted Mahatma Gandhi national rural employment guarantee scheme (MNREGS).

“The ditch you see has been dug up four times, incurring an expenditure of Rs 40 lakh on it,” admitted Lakma Ram, the sarpanch of Chandela panchayat, pointing at a large pond that remains dry during most of the year.

The story is similar for every panchayat in this block.

Each of the 25 panchayats has five ditches on an average, and an annual allocation of Rs 10 lakh is made to dig (and re-dig) each ditch, as they get covered up every monsoon. With 125 ditches in the entire panchayat, the administration spends a whopping Rs 12.5 crore (125 ditches multiplied by Rs 10 lakh) every year.

And here we are talking about just one of the five blocks in Sirohi district.

So, why this colossal waste of public money on digging ditches, and not on something that lasts and is real asset for a panchayat?

The answer lies in the rules of MNREGS, which say Rs 60 out of every Rs 100 spent on any project has to go toward labour wages. The remaining Rs 40, the rules say, is meant to procure material.

Over to para 9, schedule-I of NREG Act-2005, “The cost of material component of projects including the wages of the skilled and semi-skilled workers taken up under the scheme shall not exceed forty percent. Hence, in the selection of works 60:40 wage-material ratio has to be maintained at gram panchayat level.”

This was done primarily to keep contractors, and machines they would have brought in, out of the labour-intensive scheme.

This ratio rule, though, disqualifies any ‘pucca’ work for the panchayat.

Playing dig-dug on repeat mode
Though sarpanches know that digging a ditch again and again in no way helps panchayats create durable assets, which incidentally is another important objective of the scheme, they expressed their helplessness.

“What do we do?” asked Lakma Ram, the sarpanch of Chandela panchayat, throwing up his hands in frustration. “The administration does not allow us to carry out pucca work, so we have to get sanctions to dig the same ditch year after year.”

In Chandela panchayat, there are eight ditches that are dug every year.

According to Lakma Ram, important works, which would be durable asset for the panchayat, cannot be taken up as part of this because they would not meet the mandatory 60:40 ratio. “We are in dire need of a minor irrigation canal in the panchayat. But there is no way this can be built under the prevailing 60:40 ratio. The material cost (to make the canal) will be much more than the labour component,” he said.

Several important works have not been sanctioned similarly in Amthala panchayat. The reason remains the same: the labour-ratio clause in MNREGS.

One village in Amthala needs walls alongside the nallah abutting agricultural land, as the flooded drain wreaks havoc on the fields each year during the monsoon months. Another village in the same panchayat needs to make concrete a patch of kutcha road that turns muddy during monsoon, thereby cutting off one part of the village from another.

However, because of the ratio rule, these works are not even included during annual MNREGS plan that the panchayat prepares. “We do not include such works in the annual plan because we know the block development officer (BDO) will not even consider it,” said Soma Ram, sarpanch of Amthala.

And since MNREGS is a demand-driven scheme providing workers legal entitlement for a job (work cannot be denied to anyone demanding it), the panchayats take the easy way out by getting sanction for the ditch that was dug only the year before.

“As sarpanch, I cannot deny work to my people. And since they are solely dependent on MNREG work, I get the same ditches sanctioned for work year after year,” said Soma Ram.

He said a ditch in Krauli village under his panchayat was sanctioned in 2011 for Rs 9 lakh, and re-sanctioned last year for a similar figure.

Wastage of money
This digging of ditches, sarpanches pointed out, deprives panchayats of valuable assets that the scheme could have created. Incidentally, at the time of its conceptualization MNREGS had also envisioned creation of durable and long-lasting assets in rural India.

“Creation of durable assets and strengthening the livelihood resource base of the rural poor shall be an important objective of the Scheme,” says schedule 1, section 4 (3) of the Act.

Along with sarpanches, the administration is also aware of the wastage of money on digging ditches but seeks refuge behind the law. “That’s what the law says and I have no authority to do anything about it. I have to stick to the mandatory 60:40 ratio,” Abu Road’s BDO, Kundan Mal Dave, said when told about complaints by the sarpanches.

The earth-digging phenomenon is not typical to the Abu Road block. It has been reported about from various parts of the country and faced flak from various quarters. In fact, so widespread is the malaise that even rural development minister Jairam Ramesh has questioned its utility, saying the scheme should look beyond digging ditches and building roads.

“How much labour will you do? How many ditches will you dig? How many ponds will you reconstruct? How much forestation will you do? There has to be a limit,” Ramesh said in an interview to ‘Yuvadesh’, the online magazine of Indian Youth Congress, the party’s youth wing, in June last year.

“I do not believe that digging a ditch and taking out soil can be dubbed as employment. Putting soil back into the ditch is also employment but do we need such labour?” he had asked.

Ramesh’s disapproval notwithstanding, the Mihir Shah committee, appointed by the minister last year, stuck to the same labour material ratio of 60:40. The committee was formed to look at ways to revise operational guidelines of MNREGS so that several concerns, including the criticism about creation of non-durable assets, could be addressed.

The committee recommended: “The labour:material ratio specified for each work must be strictly adhered to. It must also be ensured that the overall labour:material ratio in each gram panchayat is maintained at 60:40. Thus, the selection of more material-intensive works and their number must be done within this overall constraint.”

Logic behind the perceived illogic
Earlier, in May 2010, the central employment guarantee council, the monitoring agency formed by the government, had ruled out any changes while examining the contention from panchayats that this 60:40 condition is too restrictive and rules out certain essential works in specific areas.

“The working group is of the view that this ratio has been stipulated to check the tendency to adopt works with a high material component. Such works invariably brings in the contractor system. Hence, the working group feels that the stipulated ratio should be adhered to except in some specific circumstances (for instance, for works in the hill states like Himachal Pradesh),” the recommendation of the working group on planning and execution chaired by Rangu Rao had said.

Acknowledging the noble intent of not letting in the contractor system and emphasis on ‘kutcha’ work in a panchayat behind the ratio rule, Lakma Ram, the sarpanch of Chandela panchayat and also president of the sarpanch association in the block, said all kutcha work that the panchayats could have done was done within the first six years of implementation of the Act. There is no such work left now, he said.

“We have done kutcha works prescribed under the Act — such as water conservation, water harvesting, drought-proofing, land development — in these years,” Lakme Ram said. “But since hardly any such work is left now, the ratio rule needs a relook to allow us to build useful asset for the panchayat.”

Quite a compelling argument it is, and one hopes when the rural development minister Jairam Ramesh takes a relook at the scheme “two years from now”, as he promised in his interview to Yuvadesh, he would take into account the arguments made by Lakma Ram and company from Abu Road.