DRAFT NATIONAL RURAL EMPLOYMENT GUARANTEE ACT:
Summary of Main Comments Received So Far

A draft National Rural Employment Guarantee Act, prepared by activists from the "right to food campaign" and other concerned citizens, was circulated on 16 July 2004 for discussion. Many comments have been received. This is a positive indication of public interest in this issue, and in the process of framing an effective law for guaranteed employment.

Some comments have already been incoporated in the "improved version" of the draft Act, dated 1 September 2004 (see www.righttofoodindia.org). Others are still applicable, and are summarised below.

Meanwhile, a modified draft has been prepared by the National Advisory Council (NAC) and submitted to the Prime Minister’s Office. The NAC draft is available on the above website, along with an explanatory note summarising the main differences between the NAC draft and the "campaign" draft.

1. Coverage of urban areas: The present draft Act only covers rural areas (including "B and C Class municipalities"). The extension of guaranteed employment to urban areas could either be incorporated in this Act or become the object of a separate "National Urban Employment Guarantee Act". Some commentators have suggested that this could be dealt with in other ways, e.g. through self-employment schemes that helps the applicants with their current economic activities such as hawking.

2. Number of days of guaranteed employment: The draft Act provides guaranteed employment throughout the year. In this respect it goes beyond the "100 days" guarantee proposed in the Common Mimimum Programme (CMP). Some commentators have proposed an intermediate benchmark, e.g. 180 days. Yet others have suggested retaining a permanent guarantee, but with suspension of the guarantee during months of peak agritultural activity.

3. Further entitlements: Various types of additional entitlements have been proposed, such as maternity benefits, advance wages, health insurance, social security, etc. It has also been suggested that the availability of crèche facilities should be gender-neutral (e.g. it could be geared to the number of children present rather than the number of women).

4. Extent and nature of decentralization: Some commentators are in favour of complete devolution of the "employment guarantee programme" to the Gram Panchayats. Others feel that the involvement and accountability of the Block and/or District administration are essential. As things stand, the draft Act is somewhat flexible on this. It takes into account the Panchayati Raj structure without diluting the accountability of the district administration. Regular social audits by the Gram Sabhas are mandatory.

5. Are "State Acts" also needed? This draft Act builds on the fact that labour and employment issues are on the "concurrent list", so that the central government is competent to pass an all-India law. It dispenses with the need for state-specific Acts.

6. Labour-material ratios: As of now there is no specific norm for labour-material ratios in the draft Act.

7. Avoiding contractors: The draft Act rules out private contractors, except in specific circumstances and with case-by-base permission. Some commentators favour a total ban. Others suggest that contractors should be allowed (to avoid limiting the range of works), provided that wages are paid directly by the government and that the Employment Guarantee Fund is not used to pay contractors.

8. Level of the unemployment allowance: There is no obvious benchmark for the "unemployment allowance". The draft Act states that the allowance should be no less than one third of the statutory minimum wage for agricultural labourers. Other benchmarks have been suggested, all the way up to the full minimum wage. Another suggestion is there could be a "graded" allowance, rising with the number of days of unemployment.

9. Timely wage payments: The draft Act states that wages must be paid weekly, in consonance with the provisions of the Payment of Wages Act. Provisions could be added for "advance" wages, and/or for daily payments whenever possible. Another suggestion is that poor families should be given food first, unconditionally, on the understanding that they will work if and when employment is made available.

10. Wage deductions for social security: The draft Act provides for up to 5 per cent of the wages to be set aside for social security entitlements, e.g. health insurance or old-age pensions. Some commentators are opposed to these deductions as they might be misused.

11. Disqualification: There are diverse views on the appropriate "penalty" that should be imposed, if any, when an applicant fails to turn up for work within the requisite number of days (as of now, 15 days), without applying for exemption, after being called for work. The draft Act states that such applicants are disqualified from applying for work, or from receiving the unemployment allowance, for a period of 15 days.

13. Skilled labour: The draft Act gives guaranteed access to "casual manual labour" (as opposed to "unskilled manual labour", as in the initial draft). This opens the possibility of bringing certain categories of skilled labour within the scope of the "employment guarantee programme". Some commentators feel that "casual manual labour" is too restrictive and other terms have been proposed, e.g. "casual labour", "manual labour", etc.

14. Disabled persons: It has been suggested that the clause regarding special provisions for the employment of disabled persons, or other persons who are unable to do ordinary unskilled manual work on account of illness etc., should be strengthened. For instance, work could be made available as a matter of right to households where no-one is able to perform ordinary manual work due to disability or related reasons.

15. Cash and kind: The draft Act allows for wage payments in both cash and kind. Some commentators suggest that part payment in kind should be made mandatory. Another suggestion is that at least 25% of the wages should be paid in cash. Some have suggested a provision whereby the labourers have the choice to decide how they would like to be paid. Others argue for cash payments on the grounds that kind payments facilitate cheating (because the money value of kind payments may not be clear to the workers).

16. Nature of works: Many suggestions have been made regarding the nature of works to be taken up under the Employment Guarantee Programme. These include minor irrigation works, development of wastelands, walking children to school, etc. It has also been suggested that the nature of works should not be such that it ruins people’s health or makes it difficult for some people (especially women) to participate. Another concern is the process through which works are selected.

17. Penalties: Another concern relates to the government finding loopholes or escape routes to fulfil its obligations under this Act, especially in the payment of the unemployment allowances, or letting funds remain unused, diverting funds for other uses, etc. Penalties in such cases should also be spelt out more clearly.

18. Finance: The sections on funding are provisional, and need further attention. Some commentators favour 100% funding by the central government. Others advocate some contribution from state governments, e.g. 25% of the cost of materials.

19. Priority groups: It has been suggested that in the allocation of labourers between different works (e.g. local works vs distant works), preference should be given to disadvantaged households, e.g. female-headed households.

22. District-level officer: The responsibilities of the CEO (at the district level) need to be listed. While penalties have been prescribed for the Programme Officer, there seem to be none for the CEO.

23. Quota for women: Many commentators feel that in the event where the employment guarantee is restricted to 100 days per household (as proposed in the Common Minimum Programme), there should be a quota for women, e.g. 40 per cent of all labourers employed in every village or Block.

24. Transparency in piece rates: It has pointed out that lack of clarity about piece-rate norms is often used to cheat labourers. There should be full transparency in the schedule of rates prescribed by the state government.