 | « Back to article | Print this article |
The implementation of the national rural employment guarantee law is expected to cost the government Rs 38,600 crore (Rs 386 billion) a year. States will be required to chip in with 10 per cent.
The estimate is based on the assumption that only one adult member from a below the poverty line rural household will come forward for the guaranteed 100 days of employment. The Centre has assumed that the scheme when fully operational will cover 38.6 million poor households across the country.
Initially, the scheme is proposed to be implemented in 150 most backward districts of the country, where the National Food-for-Work Programme is currently operational. The annual outgo for these districts would be Rs 8,985 crore (Rs 89.85 billion).
"Considering that a programme of this kind is being contemplated on such a massive scale for the first time, it has to be necessarily implemented in phases so as to eventually cover all the rural areas across the country, subject to the economic capacity of the Central and State governments," the Centre said in its statement of objects and reasons for the National Rural Employment Guarantee Bill, 2004, which was tabled in the Lok Sabha on Tuesday.
As per the Bill's financial memorandum, the scheme entails a daily wage component of Rs 60. In addition, the government will spend Rs 40 a day on material cost for creating employment.
Of the Rs 40 per day material cost, 25 per cent is to be borne by the states. The material cost will include the wages paid to skilled and semi-skilled workers.
On its part, the Centre will bear three-fourth of the material cost, including the wage component for the unskilled labour, and the administrative expenses. The task of paying the unemployment allowance has been left to the states. States will bear the administrative costs related to constitution of the State Employment Guarantee Council.
The Bill stipulates that the wage rate be notified by the Centre and it will not have any link with the minimum wage for agricultural labourers applicable in different states. At present, this varies between Rs 25 and Rs 135 a day.
Provisions have, however, been incorporated in the Bill to enable the states to formulate schemes in such a manner that the need for payment of this allowance is minimised.
The Bill has proposed that states would not be liable to pay an unemployment allowance in case an applicant does not accept the job offered, or does not report for work within 15 days of being notified or is absent for over a week without notice.
If the earnings of a household from wages and unemployment allowance equals Rs 6,000 a year, the government will cease to pay the unemployment allowance.
The unemployment allowance, to be determined by states, will not be less than one-fourth of the wage rate for the first 30 days of the financial year and not less than half the wage for the remaining 70 days of the fiscal.
Within six months of the date of commencement of the legislation, states would be required to prepare their schemes to provide a minimum 100 days' employment during a financial year at the specified wage rate.
The Bill seeks to create a national Employment Guarantee Fund where the Centre will appropriate money through a grant or loan. A similar fund is also proposed at the state level.
The projects to be taken up under the scheme are to be decided by the gram sabhas. Specific responsibilities have been proposed for the standing committee of district panchayats, district programme co-ordinators and panchayats.
Welfare scheme
