With the Comptroller and Auditor General of India recently releasing an unflattering draft report on the National Rural Employment Guarantee Act (NREGA), the ideas of inclusion, employment and equality illustrated by leading world economists seem to gain more relevance in the Indian context.

“NREGA to me seems like a policy of desperation. The government needs to come out with better policy initiatives like those which help in inducing greater professionalism in agriculture and in drawing people into full time employment” said Edmund Phelps, Nobel Prize winning economist. Speaking at the Bharat Ram Memorial Seminar on ‘Development with Justice’ today, Phelps elaborated upon his idea of the complex issues of development and social inclusion.

According to Phelps, lack of development in countries is a result of underdevelopment of cultural and other institutions as well as weak regulatory bodies. Further, corruption, technological and knowledge backwardness also contribute towards underdevelopment. The Nobel Laureate believes that in order to develop, it is imperative for a country to acquire dynamism. “Sustainable development can be obtained only with creativity and dynamism in the market place,” he said.

Talking about inclusion, Phelps said it is important to provide jobs to the people since inclusiveness goes beyond just income equality. “While the pecuniary benefits of a job include its wages and hence the ability to acquire and enjoy various goods available in the market, the non- pecuniary benefits include satisfaction and creative application of one’s mind,” he added, while emphasising the need for collective intervention by the state to address the issue of inclusion.

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