Cash Transfer in India-Will it help migrant workers?

Umi Daniel

The present Government at the Centre has been quite vocal and desperate on launching Conditional Cash Transfer in India. Mr. P.Chidambaram, The Finance Minister of India has termed CCT as a big game changer for fighting corruption and protecting public money. It is claimed that under the regime of CCT (Conditional Cash Transfer), cash will flow directly to the beneficiary without any leakage. However, the only apprehension the government is having is to reaching out to the last mile? The non banking service area is still a huge challenge for the government to transfer DBT (Direct Benefit Transfer). According to  RBI  only 40% of the population in India have access to banking facilities. Out of 6.4 lac villages, the presence of bank branches with full-fledged services is available only in 34000 villages and recently another 73000 villages are covered under Banking Correspondent model.

It is almost 7 years since MGNREGA was introduced as an ambitious flagship programme of the Government to provide assured wage employment to the people. The wages under MGNREGA has been transferred to the beneficiary directly into their bank or post office accounts or else transacted through BC (Business Correspondent) model. However things are yet to take shape to streamline the system of wage transfer. Large scale irregularities and grievances like; late transfer of money, fake withdrawal, discriminatory attitude  of bank officials,  existence of middleman in banking transaction are today huge grey areas which is creating concern for the government.  Prior to the MGNREGA the average customer footfall in a rural bank was drastically low. But today, thanks to MGNREGA, the numbers of accounts holders both in post office and banks have swelled 4-5 times.  Today we have a newer generation of customer particularly illiterate, poor, working class men and women are having a bank account. However, the banks are not well prepared and don’t know how to provide quality and equal services to these people.  Government is aware about the ground situation and to tackle this problem, there are plans to setup ultra banks in rural area which will operate as representative or business correspondence model.  It means, a one-man bank or virtual banks will be operationalise for rural folks.   

Of late, the RSBY, ( Rasthriya Swastya Bima Yojana) has emerged as the first national health  insurance scheme in India in 2007. It is considered as high tech and deal with cashless health insurance programme for the BPL and other vulnerable people.Rrecently the World Health Organisation carried out a assessment on the efficacy of the programme. The Assessment reveals that more than 50% of the enrolled RSBY beneficiaries are incurring out of pocket cost (OoP) on their health. The report also goes onto question accountability of insurance Companies towards its clients particularly the poor BPL families. It has a special provision for supporting migrant and left behind family member’s health needs. However, when we observe the same  in the migration prone area of Odisha, the scheme is yet to show any significant success for the migratory population and people don't know much about enrollment, benefit and procedure of claims.  

Both MGNREGA and RSBY have no doubt have emerged as strong  pro-poor branding programme with huge budgetary allocation by both the Centre and the State. On the contrary it has created a huge business opportunity for the banks and insurance companies in India to rollout their business in rural sector. Interestingly, MGNREGA has gave birth to the Business correspondent Model in which the private individuals have been allowed to handle public money. At the same manner, RSBY has backed up the insurance company with 100 % assured premium to run the health insurance scheme in India. The smart-card cashless health insurance scheme is today much depends on the whims and mercy of private insurance companies and bureaucrats rather making it a people centric social assistance security programme.

It looks, government is in a hurry to convert more and more subsidy based schemes into monetary benefit without realizing the ground reality.  Aadhar, a multi crore IT & biometric enabled unique identity card has been seen as panacea for the DBT for the poor people. Although Aadhar based identity card has been rolled out in India and already enrolled huge number of people, but Aadhar is yet to be debated and approved in Parliament. It may get into rough weather if the Parliament rejects it. Other major debate is on food entitlements vis-à-vis cash transfer. There are political as well civil society opposition against government plea for converting food entitlement into cash transfer will lead to unequal food distribution among the family. India has the oldest and largest food security programme through its Pubic Distribution reaching out to the poorest people in India both at rural and urban locations. Progrramme such as school meal programme, ICDS nutrition programme and emergency feeding programme is reaching out to a large number of most needy and vulnerable people living in rural and urban locations. Slightest deviation on these food entitlements and converting the same into financial benefit will result into huge negative impact on the food security of people.  

The much waited food security bill is yet to be tabled in the Parliament. The Cash, vis-à-vis food entitlement will definitely figure in the discussion and there is bound to have different position on the issues on the floor of Parliament. India’s most urgent and priority need is to handle the growing food insecurity and malnutrition issue which is a national shame. While world over there are apprehensions are raised about the realistic target of achieving the Millennium Development goal of making hunger half by 2015. India is no exception and the target for halving hunger looks difficult. India is yet to devise a system to manage the overflowing good grains grains rotting inside the Food Corporation of India’s Godown. The farmers are yet to get Minimum Support Price for their food grain. In 2012, the IFPRI ( International Food Policy Research) ranked India 65 in a list of 79 countries where serious hunger and malnutrition persists. With over 43% of babies suffering from malnutrition which ranks India under Ethiopia and Bangladesh and yet large number of people under poverty line, the decision to do away with food and convert the same to cash will be counter productive.  

Finally, will Cash Transfer help the seasonal migrant laboueres in India?  My answer will be yes and no. RSBY health insurance is a revolutionary programme and I think may  certainly benefit the migrant if it is made universally accessible. Portability of basic entitlement and services in case of inter-state and intra state migrants are another key policy area which the government should look into. Migrant will be happy to have their entitlement or benefit coming directly to their bank account while they are on the move. But the worst sufferers will be the left behind people like old, disabled and diseased who may be deprived of accessing the household based subsidy at source if the head of the household is away. Today thousands of inter-state migrants are facing difficulties in remitting their earning from urban location to their villages through banks and ending up in sending the money through hawala or couriers. I think, the banking should come for the rescue of these poor migrants prior to introducing CCT. As per a study conducted by NABARD, the banks are losing out more than 700 crores since there are no formal banking is available for migrant workers to remit their money.

It is a constitutional mandate of the government to provide food and social security to the most vulnerable and poor in India. Government is also held accountable if the service provider fails to discharge its duty. However, today more and more corporate and corporations are entering into the arena of providing social entitlements and basic services to the people in India. The banking and insurance for poor is one such area which the government has opened up the private banks and insurance companies to deal with the public money. 

Can MGNREGA reduce distress migration?

Umi Daniel

Addressing distress and hunger migration is considered as a one of the key impact area to measure success of MGNREGS.  When MNREGA was enacted 2005, the underlined obligation of the Act was to facilitate a people led process for creating a win-win opportunities for the poor towards accessing 100 days employment, create productive assets and  revitalize natural resources so that the people have sustainable livelihood and resources to fight poverty and hunger.

During my interaction with one of the migrant returnees Sagar Deep in Bolangir district who went to Andhra Pradesh to work as migrant worker long with his family of three as brick moulder. Three of them have received 19,500 as advance from the middleman and Sagar used the advance to repay his old debt, left some money with his old father and mother to survive while he and his family is away. After reaching at the brick kiln in Patancheru in Andhrapradesh, he and his family members worked hard to make his share of daily bricks so that he can earn enough money towards the weekly food allowance. His weekly allowance was somewhere between Rs.400-450 and he has to fetch his weekly ration and other personal belongings. After one month of work in the brick kiln, his wife fell ill with bouts of diarrheal attack and unable to work. As a result, he and his school dropout son had to work hard to complete the task for which they got the advance otherwise Sagar was pretty aware that the family will be denied their weekly food allowance and they will starve.  When I asked him as to why he hasn’t   try availing employment under MGNREGA instead. Little reluctantly Sagar said “while it is much easier to get dadan( dadan in Oriya is advance) advance from a Sardar(middleman) and a assured  work and food in the brick kiln for six month, it is quite difficult to get 100 days of full employment and timely payment of wages from the government officials” . Sagar was right, when I look at the MGNREGA performance in Bolangir, it gives a sorry picture and barring one or two blocks the average employment provided to the people is below 30 days. In such situation Sagar and many other landless and wage earner choose to go to the money lender to borrow money and in turn migrate and dare to go to the government people to demand job under MGNREGA.  

Predominately, the vulnerable people’s calendar or seasonality of hardship, unemployment and migration doesn’t match with the seasonality of employment which is rendered by the government delivery system. In western Odisha and many other regions, the migration session is observed during October- June. People migrate during the month of October-November and return prior to the monsoon.  And when the people return, they further fall into hardship and sufferings since employment generation is stopped due to rain and only the same is restored after the rainy days.

Tired and exhausted the migrants return home and the struggle to search for food and employment began a fresh.  The nightmare for employment continues as due to onset of rain, the government wage employment put on hold and would restart after the rains, The NTFP season is on its peak and probably provides  5-6 days of work, some of them do go back to their small piece of land and try their luck to find out  some credit from the local money lender for seed and fertilizer, few unlucky ones again shall migrate to the command area of Bargarh and Sambalpur to work as agriculture labourers for few days, and majority of the returnees again will make a beeline  to the local money lender and borrow some money to survive during the lean period and towards meeting emergency needs till the monsoon and get themselves committed for another cycle of migration to repay the money.

Historically, the western part of Odisha is considered as drought prone. Every alternative year the region encounters drought like situation which results into mass migration of agriculture workers, small farmers and landless poor people. These western districts of Odisha has a long history of drought relief programme popularly known as food for work and other drought relief food emergency.  

India has the oldest and long account of drought relief progamme being implemented in various states which were backward and drought prone. The famous FFW (Food for Work) and EAS (Employment Assurance Scheme) used to be the popular flagship drought relief programme of the government. Huge resources were allocated to create employment through distribution of food grain as wage. However, the FFW used to deprive people from their access to cash as wage to enhance their purchasing capacity. Gone are FFW and then entered EAS (Employment Assurance Scheme) which has somehow assured some employment to the needy in rural and backward region. However, the same didn’t survive for long due to mal administration, manipulation and corrupt practices by middleman, contractor and unscrupulous nexus of government officials and abruptly faced its silent death.  

In 2005, Mahatma Gandhi National Rural Employment Guarantee Act( MGNREGA) has been enacted as a demand driven and rights oriented Act to provide 100 days guaranted employment to the rural households. The programme was conceptualized on the basis of Maharashtra Employment Guarantee progarmme which was quite successfully ensured round the year employment to the people in Maharastra.   Today, MGNREGA has been considered as single largest employment delivery programme which is reaching out to 50 million rural households in India. A cursory observation on the current level of employment in MGNREGA implies very poor and discouraging trend in Odisha and particularly failed to provide 100 days of employment and towards reducing distress migration in the backward regions of Odisha.  

Needless to say, NREGA could be a solid game changer for transforming rural employment situations and provide a long-term solution to poverty alleviation and creation of productive rural infrastructure. Many of the states in northern and Southern Indian states have demonstrated effective implementation of MGNREGA and reduction of rural distress. The state of Odisha which has more number of backward districts as per the Planning Commission backward matrix of districts, and having large population under BPL and destitutions and  higher incidence of rural migration can pull out huge benefits from MGNREGA with effective planning, community ownership, targeting and creating micro level transparent MGNREGA governance.

 As discussed earlier, MGNREGA has the requisite ingredients to address distress migration resulting due to acute poverty, unemployment and natural calamities.  However, to realize the same, the administration needs to identify the vulnerable people and target MGNREGA during the lean period. The distress migration in Odisha is primarily debt induced.  If MGNREGA will deliver a full 100 and plus days employment to those vulnerable families who migrate due to debt and distress will likely reconsider their decision and rather earn their livelihood from MGNREGA.  Some of the possible steps for reducing distress migration through MGNREGA are discussed below. 

The rural distress among tribal and dalit people is more acute during monsoon. The rainy days distress pushes the people to go to the money lender due to non availability of government employment and other social security.  The accumulation of distress by end of the rainy days force them to go to the labour contractors to borrow some advance to repay the rainy days debt and look for a new migration avenue. It is also seen among the migrant returnees who come back during rainy days to get into the same debt trap and becoming perennial migrant worker.   In such case, identification of vulnerable family, chronically debt ridden families and potential migrant are essential. Once the people are identified, a targeted mode employment generation during lean period will reduce the vulnerability.  

Secondly and more importantly, the MGNREGA work can be planned in incremental basis. Fifteen days of work for each month can be planned and wage payment within fifteen days should be made mandatory. Thus, with incremental delivery of 15 days employment, a migrant family can get 6-7 month of gainful employment and since a monthly entitlement in term of MGNREGA wage is ensured, he may not rush to the money lender and chances of winning him from debt is easier. Hence, the Labour budgeting should be well planned for migration region so that work during distress period doesn’t stop. The MGNREGA also has provision for self of work, hence it is also advised that the shelf of work under MGNREGA should focus creating more productive assests for the landless poor and migrant to cushion their livelihood.  

Thirdly, MGNREGA shouldn’t be seen as yet another short lived scheme of the government rather a rights oriented demand based employment generation. Each district and region has its unique development challenges. Some districts may be having migration as problem, some other may be having drought or cyclone as recurrent issue, some other district may be having tribal population who needs irrigation. Hence, decentralized strategy on the area development approach is important. Similarly a distress migration reduction strategy using MGNREGA should be developed and accordingly long term assets generation which will help in providing sustainable livelihood for the poor and vulnerable should be planned. If needed other similar development projects like, Watershed management project, IAP, Agriculture programme should be dovetailed with MGNREGA to yield quality success under the MGNREGA programme.  

Fourthly, Most of the employment generation work is targeted on soil excavation or road laying work. it is a irony that, these works don’t take off or run during monsoon. The recent guideline from the Minisry of rural Development on revised work under MGNREGA emphsising some  The problem with these work is that it automatically stops during rainy days. Quite rescently the Ministry of Rural Development has suggested a wide range of work under MGNREGA which can under take during rainy days. Some of the work like construction of goat shed, cow shed, plantation kindly of work still be taken during rainy days.

Finally, MGNREGA should be more seen as a peoples programme and should take into account the poverty and rural destitution which will be addressed on the long term manner. The quality and productive assets generation for a sustainable livelihood for poor and landless people will certainly help reducing distress migration.