The Hindu Editorial Analysis | 11th Feb 19

Table of Contents

The solution is universal

Strengthening the MGNREGA would be more prudent than a targeted cash transfer plan like PM-KISAN
Rural distress has hit unprecedented levels. According to news reports, unemployment is the highest in 45 years. To allay some misgivings of the distress, one of the announcements in the Budget speech was that “vulnerable landholding farmer families, having cultivable land up to 2 hectares, will be provided direct income support at the rate of ₹ 6,000 per year”.
This cash transfer scheme has been called Pradhan Mantri Kisan Samman Nidhi (PM-KISAN). The Ministry of Agriculture has written to State governments to prepare a database of all eligible beneficiaries along with their Aadhaar numbers, and update land records “expeditiously”. The letter further states that changes in land records after February 1, 2019 shall not be considered for this scheme.

A comparison

Undoubtedly, farmers’ distress needs urgent attention but let’s see if the PM-KISAN is a reasonable solution. Let us first compare some basic numbers with the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA).
For example, if two members of a household in Jharkhand work under MGNREGA (picture) for 30 days, they would earn ₹10,080 and a household of two in Haryana would earn ₹16,860 in 30 days. Jharkhand has the lowest daily MGNREGA wage rate, and Haryana the highest.
Put simply, a month of MGNREGA earnings for a household is more than a year’s income support through PM-KISAN anywhere in the country.
PM-KISAN is a targeted cash transfer programme and MGNREGA is a universal programme. Any rural household willing to do manual work is eligible under the Act.
According to the 2011 Socio-Economic and Caste Census, around 40% of rural households are landless and depend on manual labour. The landless can earn through the MGNREGA but are not eligible for the PMKISAN scheme. Notwithstanding the meagre amount, the PM-KISAN might be pitting the landless against a small farmer.
Further, it is unclear how tenant farmers, those without titles, and women farmers would be within the ambit of the scheme.
There is also substantial evidence to demonstrate that universal schemes are less prone to corruption than targeted schemes.
In targeted programmes, it is very common to have errors of exclusion, i.e., genuine beneficiaries get left out. Such errors go unrecorded and people continue to be left out. It is in some of these contexts that strengthening an existing universal programme such as the MGNREGA would have been a prudent move instead of introducing a hasty targeted cash transfer programme.
The Agriculture Ministry’s letter states that “funds will be electronically transferred to the beneficiary’s bank account by [Government of India] through State Notional Account on a pattern similar to MGNREGS”. There are important lessons to be learned from the MGNREGA implementation. The Centre has frequently tinkered with the wage payments system in the MGNREGA. It’s creditable that timely generation of pay-orders have improved, but contrary to the Centre’s claims, less than a third of the payments were made on time.
And in contempt of the Supreme Court orders, the Centre alone has been causing a delay of more than 50 days in disbursing wages.

Field realities

Moreover, repeated changes in processes result in a hurried bureaucratic reorientation on the ground, and much chaos among workers and field functionaries alike. Field functionaries are pushed to meet stiff targets. Being short-staffed and inadequately trained, this results in many technical and unforeseen errors. A case in point is the rushed manner in which Aadhaar has been implemented for the MGNREGA.
Several MGNREGA payments have been rejected, diverted, or frozen as a consequence. In the last four years alone, more than ₹1,300 crore of the MGNREGS wage payments have been rejected due to technical errors such as incorrect account numbers or faulty Aadhaar mapping. There have been no clear national guidelines to rectify these. There are numerous cases of MGNREGS payments getting diverted to Airtel wallets and ICICI bank accounts. In a recently concluded survey on common service centres in Jharkhand for Aadhaar-based payments, it was found that 42% of the biometric authentications failed in the first attempt, compelling them to come later. This continued harassment faced by people would have been a more humane question to address rather than brushing them aside as “teething problems” and build a new scheme on similar shaky platforms.
The success of the PM-KISAN is contingent on there being reliable digital land records and reliable rural banking infrastructure — both are questionable at best.
While ₹75,000 crore has been earmarked for this scheme, the MGNREGA continues to be pushed to a severe crisis. The MGNREGA allocation for 2019-20 is ₹60,000 crore, lower than the revised budget of ₹61,084 crore in 2018-19.
In the last four years, on an average, around 20% of the Budget allocation has been unpaid pending payments from previous years. Thus, subtracting the pending liabilities, in real terms, the Budget allocation has been lower than 2010-11. Despite a letter to the Prime Minister by citizens and MPs in January 2019, (as of February 8) all MGNREGA funds have been exhausted.
While the country stares at an impending drought, workers languish in unemployment. The MGNREGA is neither an income support programme nor just an asset creation programme. It is a labour programme meant to strengthen participatory democracy through community works.
It is a legislative mechanism to strengthen the constitutional principle of the right to life. That the MGNREGA works have demonstrably strong multiplier effects are yet another reason to improve its implementation.
Despite all this, the MGNREGA wage rates in 18 States have been kept lower than the States’ minimum agricultural wage rates. This acts as a deterrent for the landless. Yet, work demand has been 33% more than the employment provided this year — underscoring the desperation to work. By routinely under-funding this Act, the Bharatiya Janata Party government continues to undermine the constitutional guarantee.
In an employment programme, adequacy of fund allocation and respectable wages are crucial, so meaningless claims of “highest ever allocation” and other dubious claims through a management information system are unhealthy for democracy.
At a time of such acute distress, does it not behove the Central government to improve the existing universal infrastructure of the MGNREGA before plunging into a programme pretending to augment farmers’ income?

No zero-sum games

India and the U.S. must work to halt trade hostilities urgently
There are alarm bells in India over a possible decision by the U.S. Trade Representative to withdraw the Generalised System of Preferences status. Under this, India is able to export about 2,000 product lines to the U.S. under zero tariff. The revocation of the GSP, which was first extended to India in 1976 as part of a global concession by the U.S. to help developing countries build their economies, will be a blow to Indian exporters, and the biggest in a series of measures taken by the Trump administration against India to reduce its trade deficit. President Donald Trump’s case on what he calls “unequal tariffs” from India rests on the trade relationship in favour of India: Indian exports to the U.S. in 2017-18 stood at $47.9 billion, while imports were $26.7 billion. The measures are in line with Mr. Trump’s campaign promises. On the matter of Harley-Davidson motorcycles, he spoke directly to Prime Minister Narendra Modi on at least three occasions, demanding that India zero out tariffs to match U.S. rates on Indian motorcycles. In March 2018, the U.S. began imposing tariffs on several Indian products, and in April, the USTR began a review of India’s GSP status, based on complaints of trade barriers from India it had received from the dairy industry and manufacturers of medical devices. In November the U.S. withdrew GSP status on at least 50 Indian products.
In retaliation, India proposed tariffs of about $235 million on 29 American goods, but has put off implementing these five times in the past year in the hope that a negotiated trade settlement will come through.
The latest deadline expires on March 1. India has also attempted to address the trade deficit with purchase of American oil, energy and aircraft.
There have been dozens of rounds of talks between officials over the past few months, but no breakthrough. U.S. officials say the decision on data localization for all companies operating in India, and the more recent tightening norms for FDI in ecommerce have aggravated the situation.
Both sides should work towards calling a halt to trade hostilities and speed up efforts for a comprehensive trade “package”, rather than try to match each concern product by product. The U.S. must realise that India is heading into elections, and offer more flexibility in the next few months. India must keep in mind that the larger, global picture is about U.S.China trade issues, and if a trade deal with the U.S. is reached, India could be the biggest beneficiary of business deals lost by China. The visit of U.S. Commerce Secretary Wilbur Ross to India this week will be watched not as much for substance, as for signals that New Delhi and Washington understand the urgency in breaking the deadlock.

Four Chinook copters arrive

In a shot in the arm for the Indian Air Force, the first four of the 15 Chinook heavy-lift helicopters arrived in India from the US on Sunday.
The first four CH-47F Chinooks for the IAF were brought to the Mundra Port in Gujarat. They will be assembled in Gujarat before being ferried to Chandigarh, where they will be formally inducted into the IAF later this year. At Chandigarh, the helicopters will become a part of the 126 Helicopter Flight, which currently operates the last of the Mi-26 heavy lift helicopters.
The helicopters have come before their scheduled arrival in March. “The ahead-of-schedule arrival of the Chinooks validates Boeing’s commitment to delivering on its promise of modernizing India’s defense forces. Through its current partnerships with Indian Air Force and Indian Navy, Boeing has ensured high rate of mission readiness and increased operational capabilities,” Boeing said.
In 2015, India had cleared the purchase of 22 Apaches and 15 Chinook helicopters for the IAF in a deal worth $2.5 billion from the US. The defence ministry had also finalised its order with Boeing for the production, training and support of the helicopters. IAF crews had begun their training on the Chinooks at Delaware in the US last year. Earlier this month, the first Chinook helicopter was handed over to the IAF in Philadelphia. Four Chinook copters arrive
The CH-47F Chinook is said to be an advanced multimission helicopter operated by the US Army and 18 other defence forces. Boeing added that the Chinook “will provide the Indian armed forces with unmatched strategic airlift capability across the full spectrum of combat and humanitarian missions.”
The Chinook, which is a battle proven machine, can carry 9.6 tons of load, including artillery guns, light armoured vehicles and heavy machinery to high altitude areas. It is well suited for mountainous operations, due to its high maneuverability and ability to easily move in and out of valleys.
For India, the helicopters would add to the existing capabilities of the IAF. They will be of immense importance when needed to quickly ferry the M777 Ultra Light Howitzers to mountainous regions.
India is procuring 145 M777s for the army for deployment along the borders opposite China and Pakistan. The helicopters could also come in use of the construction agencies in the North East to lift heavy equipment for strategic roads construction.