Adding Skills to NREGA benefits - A Kumar & V Raghunathan

Can the National Rural Employment Guarantee Act (NREGA) be the answer to the country’s skill-starved construction industry? Yes. NREGA is among the largest social welfare schemes implemented anywhere in the world. The Act provides for at least 100 days of wage employment to at least one adult member of a rural household who is ready to do unskilled manual work.

In the current financial year alone, it has reached out to 35.8 million households in selected districts, creating nearly 1.59 billion person-days of work in this financial year. NREGA envisages that physical work leading to community assets like irrigation canals, all-weather roads, water tanks, etc, will be created through this labour in the vicinity of villages.

As with any government scheme, proponents hail it as one of the most direct and effective poverty alleviation programmes, while detractors believe a lot of money is going into wrong and undeserving hands. There have been two or three significant and recurring criticisms about NREGA. One of them is that the assets created by the scheme are of dubious quality. Another criticism is that funds are being given out as dole to the not-so-deserving. Neither criticism may be entirely unwarranted, as it is difficult to check the exact status of people or quality of assets being created in such a massive programme.

At another level, the country’s infrastructure sector is booming but the construction industry is in dire need of skilled workforce. The paucity is not only delaying projects but also impacting the quality of workmanship. There is hardly a channel of supply of skilled and certified masons, bar-benders, carpenters, etc, on the scale required, so that a person serving as an unskilled labour till the other day at one site may declare himself a mason at another site, the next day.

An Assocham study shows that the number of vocationally-trained workers in India is just 5.3% compared to 95.8% in South Korea, 80.4% in Japan, 78.1% in Canada and 75.3% in Germany; that nearly 93% of workers (or 353 million people) in India’s unorganised sector do not get employment-related training; that around 80% of the new entrants to the workforce every year have no opportunity for skill training; that against 12.8 million new entrants to the workforce annually, the existing training facilities can train only about 3.1 million, thus releasing nearly 10 million untrained workers to an already-big pool! Grim numbers. Surely, we do not have much reason to celebrate our largest youth population in the world if much of it is unskilled?

This leaves us with two seemingly-unrelated phenomena. But a little reflection shows how the two problems taken together automatically lead to a solution — for both. It is evident that NREGA can mitigate a lot of criticism directed at it if it can actually create value for the individual beneficiary as well as the nation. To do so, perhaps NREGA is best implemented in a PPP model where construction companies are invited to take up projects in defined geographic areas, employing NREGA-registered labour for the project under implementation. In fact, the real benefit of this idea underlies in its potential for long-term skill-building, as described below.

The project being implemented under the PPP model must create an on-the-job training module aimed at upgrading the skills of people working at the sites. It could be about 80% hands-on training while 20% could be on concepts, quality and other technical aspects delivered in pedagogy suitable for the target group. A select few who come up to the standards benchmarked by the firm for a particular skilled category could be given certificates for the relevant skill. The industry will benefit not only in terms of fulfilling its social responsibility and upgrading the labour force but also in creating a certified cadre of skilled professionals for themselves and the country. With the government aiming to spend nearly $500 billion in the next five years on infrastructure, it is time to move beyond creating jobs for a huge unskilled workforce?

This has the potential to turn NREGA into an earn-while-you-learn engine that will propel the skilling of our workforce, and not just end up as a dole-out programme. This would also be in line with the goals of National Skill Development Mission that plans to add 10 million workers to the non-agricultural sector through skill training. The combined budget of various ministries towards this objective alone is in excess of Rs 10,000-15,000 crore.

The major mode of training suggested in the mission document is also through the PPP mode, which includes adopting existing ITIs, running short-term courses ready for employment which is more hands-on, running skill development centres at the rural doorstep, etc.

Thus, marrying the two major plan initiatives will kill two birds with one stone: make NREGA more effective and provide a steady supply of skilled workforce. The idea may call for some path-breaking coordination at the national level, but that could be handled by the Planning Commission.

(Avanish Kumar and V Raghunathan are with GMR Varalskhsmi Foundation. Views are personal.)

http://economictimes.indiatimes.com/Opinion/Adding-skills-to-NREGA-benefits/articleshow/5277427.cms