To return to the NREGS (the National Rural Employment Guarantee Scheme), no one argues that this is the best way to deal with poverty. It would be preferable to encourage labour-intensive growth (reform our labour laws that protect incumbent union leader sultans and discourage creation of new jobs), implement genuine land reform by giving clear title to peaceful possessors of land (not give tenancy protection which makes the market in land rigid and prone to litigation; not arbitrarily classify land as ‘agricultural’ or as ‘reserved for SCs/STs’, which only enables the corrupt and the well-connected to get them ‘converted’ and extract value), build roads (roads have many positive externalities to improve the wealth of the poor apart from being labour-intensive in themselves), give vouchers/subsidies directly to poor parents so that they can send their children to English-medium schools like their elite counterparts (acquiring the surest ticket out of their poverty trap), etc. But given that the Indian state is unlikely to do what is required to genuinely help the poor, the NREGS was and is conceived as admittedly a second order sub-optimal solution. But that is no reason to discard it while pursing an abstract best-case alternative kicked around from committee to committee in the miasmal corridors of Yojana Bhavan.

The NREGS has many attractive features. First, it envisages wages for work, not doles. Wages confer dignity on our poorest fellow-citizens. Second, the wage rates are not set too high. If alternative productive private sector employment were to come up, applicants will automatically go in their search. Third, and most important, it has the capacity to create social assets — lakes, check-dams, reclaimed waste-lands with trees, toilets for schools, etc. By being gender-neutral, it is conducive to the liberation of the enormous reservoir of human capital in our female work force, currently condemned to undervalued, underpaid drudgery.

... contd.