Noted economist questions need for MGNREGA


By Our Special Correspondent

 Shillong: There is a growing anger of urban and semi-urban citizens which has manifested itself in the recent protests against corruption and sexual abuse. This is because expectations far outstrip the economic growth in the country stated noted economist Dr Bibek Debroy. He said if India’s economy was in order, politically engineered schemes like MNREGA would not have been required to alleviate poverty. He said all these subsidies for the poor are perpetuating a dole culture. Debroy, was addressing a select audience at the Asia Confluence, Laitumkhrah.

Dr Debroy who is currently with the Centre for Policy Research, New Delhi is here at the invitation of the Government of Meghalaya. He deliberated on two key themes: India’s growth story and integrating India’s North East with East Asia. Debroy said that after the 1991 economic reforms the traditionally laggard states like Bihar, UP, Rajasthan and Madhya Pradesh registered a sudden growth. “States which were slack have registered rapid growth after the first decade of economic reforms. This also results in grave income inequalities,” Debroy said.

Pointing to the problem of actually identifying the poor in order to transfer subsidies to them, Debroy said, “We think that Nandan Nilekani’s AADHAR card will solve all problems but if the poor are not identified through a suitably defined criteria they will never benefit from government subsidies,” he added.

Explaining that all resource have opportunity costs, Dr Debroy said what is spent on subsidies for the poor could have been spent on building roads, schools or health centres. He said the problem with resource devolution is that it is not transparent and very messy. Debroy debunked the centrally sponsored schemes because they are not tailored to the needs of specific states.

“In the PMGSY money is given to build roads only, not bridges. But in many of the hill states, bridges connect two roads, so where will the money for the bridges come from unless there is internal revenue generation?” Debroy questioned. He was hinting at incapability of special category states like Meghalaya to generate internal revenue.

Debroy said there are areas of governance that the state needs to vacate but others that it cannot transfer to the markets such as law and order, roads, electricity generation and transmission, water, irrigation and health.

Speaking of Meghalaya and its linkages with East Asia, Dr Debroy said the economy of South India is well integrated with Sri Lanka, hence Meghalaya could register a rapid growth in the short term if its economy is integrated with that of East Asian countries. He however pointed to the need for Meghalaya to identify its growth engine. “Is it manufacturing, agriculture, educational services or tourism that could trigger the Big Bang growth for Meghalaya’s economy?” Debroy questioned.

Later at an interactive session, Dr Debroy said he did not agree with the Right to Food programme as the delivery system is bound to be faulty since there is no credible data to identify the poor. “No one who is in the working age group should be given subsidies. If at all anyone is to be subsidised then it should be children and poor women in female headed households, Debroy contended.