PM in Parliament[Back]

August 24, 2005
New Delhi

PM's intervention in the debate on National Rural Employment Guarantee Bill 2005 in the Rajya Sabha

"Mr. Chairman, Sir, this Bill that is being discussed by this august House is truly in the nature of a landmark legislation. It represents a new beginning, a landmark in the regime of rights enjoyed by our people, a landmark in our efforts for social equity and justice through the provision of social safety nets. Sir, it is a path-breaking legislation that entitles our rural poor to a guaranteed employment for a defined number of days, a means of sustenance, a means to avert distress, a means to secure two square meals a day and a means to lift them out of the trap of poverty. It is a commitment that the Congress Party has made to the people of this country in its election manifesto which is the culmination of several decades of efforts of the Congress, under the Prime Ministership of Shrimati Indira Gandhi and Shri Rajiv Gandhi, to move towards the right to livelihood. It is a commitment of the UPA Government to the nation and this Legislation demands straightforward commitment to the cause of the poor. Sir, the Government acknowledges the pioneering role of the National Advisory Council and Shrimati Sonia Gandhi in drafting this Legislation, in maintaining the momentum and pressure required to bring it to Parliament speedily and in creating the necessary space for public debate which has enabled, in my view, the drafting of a Bill which is comprehensive, wide-ranging and most satisfied. A few pieces of legislations have benefited from a debate, as extensive as this one, which has taken place all over our country. History will remember Soniaji for this landmark Legislation, an ideal venture, that if this Government is to be remembered for a single law or policy, it will be this one.

Mr. Chairman, Sir, why do we need a legislation of this type? It was the dream of the founding fathers of our Republic that as India industrialises, more and more people will shift out of agriculture and, therefore, industrialisation, by and large, provides a solution to the problem of securing gainful livelihood for all our people. We have significant industrialisation. We have today industries in almost every sector of our industrialised economy. But it is also true that the pace of industrialisation and the pace of industrial employment associated with that industrialisation has not been as fast as it ought to be. The result is that at the time of Independence, nearly 70 per cent of our people were living in rural areas. Today, the proportion is no less than 60 to 62 per cent. Therefore, employment strategies have to be two-fold. We have to accelerate the tempo of industrialisation. We have to accelerate the tempo of labour-friendly industrialisation. Therefore, what comes in the way of speedy industrialisation of our country is the promotion of labour-intensive methods of production and labour-intensive industries that can hurt this process of creating more job opportunities outside agriculture.

This has to be the major plank of our Government in the years to come and I do hope that the processes that we have set in motion in the last 15 years will ensure faster and speedier industrialisation of our country. We have still to take measures to see that this industrialisation is as labour-friendly as possible. I will come back to that aspect of the problem a little later. At the same time, for the people who are living in rural areas, we have to create an environment in which their output and employment opportunities can go up. I look at the differences between urban India and the rural India at the time of Independence. They were much narrower than what they are today. So, obviously, our rural areas have lagged behind. The development of our agriculture, investment in agriculture, investment in new agricultural technologies and ensuring that the small and marginal farmers also participate in the processes of the Green Revolution have to be an important plank of our strategy for lifting our population. But we know that about 25 per cent of our population are landless. Now, agriculture does offer gainful employment opportunities for a major part of the year even for this population. But we all know that once the seasonal peak, the sowing and harvesting period, is gone, there is considerable unemployment and underemployment in rural areas. We have legislated the minimum wage legislation in our country to take care of the landless labour, to put a floor on their incomes. But we all know that in rural setting of the type that prevails in our country it is very difficult, in practice, to reinforce the minimum wages legislation. So, we need strategies to lift the floor of the poorest of the poor and employment guarantee is one way to increase the bargaining power of the poorest sections of our population, the landless, the Scheduled Castes, the Scheduled Tribes and our women. Now, it is certainly true that what we are offering to our people is a modest amount, gainful employment of 100 days at a minimum wage of Rs.60, not more than Rs.500 per month for a family. I recognise that this, by itself, is not sufficient. But taking into account that most agricultural labour households also get some gainful employment during the peak season, the sowing and harvesting period, I do believe that this, at the margin, will help, in particular, the landless families to raise their living standards. It will help to provide social safety nets which will protect them against the vagaries of unemployment. I sincerely hope that over a period of four or five years we will cover all the rural districts of our country. That is our solemn commitment. Employment schemes have existed for a long number of years. When Indiraji was the Prime Minister, a number of employment programmes were devised. Rajivji devised many agricultural employment programmes. Similar employment assurance schemes were devised when Shri Narasimha Rao was the Prime Minister and I was the Finance Minister. There is, however, a cardinal difference. For the first time, we are now recognising the right to work as a fundamental legal right. Therefore, it casts on all of us in Government and all those who are concerned with the processes of governance in this country to make every effort that this solemn commitment, this solemn legal obligation is honoured in letter and spirit.

I will not be one of those who will say that there is no problem in sight. There are problems but life would not be worth living and not that interesting if there were no problems or difficult problems at that. There is, first of all, the problem of resources. If the economy continues to grow at the rate of 7 to 8 per cent per annum, I am confident that this country will generate enough resources to finance not only this scheme but also many other schemes which our Government has brought. I would like to mention that the major scheme, major programme for expansion of rural infrastructure, in the Bharat Nirman Scheme involves a total expenditure of Rs. 1,74,000 crores, for the next four years. We have taken new commitment to expand the network of rural roads; to expand the network of electricity to every village in our country; to provide safe drinking water to all the remaining 74,000 households; to expand the irrigation facilities for one crore hectares; to build sixty lakh new rural houses and to ensure that there is, at least, one telephone in every village of our country. In addition to rural infrastructure, we have taken a massive expansion of the elementary education programme. For that, our Government has imposed education cess which is being earmarked, apart from other budgetary resources, for expansion of the Sarva Shiksha Abhiyaan. We have, today, in our country, as a result of our efforts last year, a universal Mid-Day-Meal Scheme working all over the country. We have launched an innovative rural health mission which will take an integrated, holistic, district-wise approach to the problems of rural health care and deal with the health care problems of our rural population in a holistic manner. We are in the process of drawing up an ambitious urban renewal programme which attends to the needs of our urban areas where today India's 30 per cent of population lives and where we are seeing, as a result, of this disaster that befell Mumbai, where the neglect of infrastructure can have such devastating consequences. We are committed to do all that. We will find resources. But I would like this House to know that these resources can become a reality only if our economy continues to grow at a rate of 7 to 8 per cent. Therefore, all those who have something to do with the processes of governance, have an obligation to ensure that nothing is done which hurts the growth of our economy at a rate of 7 to 8 per cent per annum. Let me say, in the long run, the vision of Pt. Nehru that India has to industrialise to get rid of chronic poverty, ignorance and disease of its people is still valid. We have to industrialise; we have to industrialise at a much faster pace. We have to ensure that this industrialisation is much more labour- friendly, much more employment-friendly than it has been the case thus far. Therefore, it requires the creation of an environment in which industries can grow, in which both the public and the private sectors can grow, an environment in which our industry will have the assurance that the Government is a facilitator, the Government is not handicapped in thinking big about the future of our country. I recollect participating in a discussion in Hyderabad the other day. There are elements of Marxist thoughts which, I think, very few people, who are students of economics and social history, can disagree.

All economies, if they have to solve the problems of mass depredation, have to be growing economies. The process of accumulation of capital is the heart of the process of development. Together with the process of capital accumulation and rapid increase in investment, we need to take full advantage of all advances in modern technology. Technology today is creating new production frontiers. And, if India is to grow at the rate of seven to eight per cent, then, not only we must invest in our country 28-30 per cent of our GDP, but we must also ensure that our enterprises, both in the public and the private sectors, do operate on the frontiers of technology. Therefore, I submit to this august House that if we want the economy to grow at the rate at which it must grow, if we have to honour our solemn commitments to our electorate and to our people of rural regeneration, then, it is also obligatory on all of us to ensure that we set a motion process which accelerates the tempo of industrial growth and employment-friendly growth, that we create an environment where private, public, -- and, I do say to this House, and I am convinced, that India needs significant doses of foreign direct investment to realise the growth rate of seven to eight per cent -- and foreign investments come in. Today, the world looks to India. There is a large amount of capital which is willing to come to India provided we have the vision, provided we have the capability to absorb this much of capital. I am very happy that my esteemed friend, the Chief Minister of West Bengal, is on a trip to Singapore and Indonesia, and I compliment him for the vision that he has brought there on his duties as Chief Minister of that State. I sincerely hope that all Chief Ministers in our country will emulate the glorious example of Shri Buddhadeb Bhattacharjee.

Also, Sir, if we have to implement these various programmes of rural regeneration, education, health-care and social assistance, then, the public finances of our Governments, both at the Centre and in the States, have also to be in proper shape. Let me say that there can be a difference of opinion about the size of the fiscal deficit. But no country in the world that I know of has got rich merely by spending its way to prosperity. Good expenditure has a role. I think good expenditure can relieve social distress. Good expenditure can also stimulate investment activity. But there are limits to all good things. Let me say that today the combined fiscal deficit of the Central Government and the State Governments at 10 per cent of our GDP is among the highest in the world. Therefore, it is very essential that this august House and all those who are concerned with the processes of governance would pool all their experience and wisdom to ensure that the fiscal health of our economy, both at the Centre and in the States, is not jeopardised. Therefore, if we have to find resources for programmes like the Employment Guarantee, then, we must look at other items of expenditure. The Finance Minister, in his Budget speech, talked of matching outlays and outcomes. I think that this is something which we should do much more frequently than we have done in the past. It is also necessary for us to recognise that the type of practices which have grown in our country are not conducive to good governance or to promoting the growth of our economy or even to promoting the cause of social justice. Then, as I look at India's electricity industry, India's electricity industry today loses Rs.30,000 crores.

I think, all observers of the Indian rural scene are agreed that the way we price our electricity is the cause of the bankruptcy of most of our State Electricity Boards. They have no money to expand the electricity. Therefore, people who are waiting for electricity are being discriminated against. And, yet, this culture of subsidisation, subsidisation of even those who do not deserve that, has come to have a hold which, I think, is pernicious for the growth of our economy, or, for the maintenance of an orderly fiscal health of our economy. In the same way, I would say, what is happening today in the petroleum sector -- and I am not making a partisan speech -- is that, for the first time in our history today, some of our navaratnas, -- and my heart bleeds when I see them; these are the jewels which our nation, our workers, our farmers have toiled with their blood and sweat to build up -- are making cash losses. I think that is something which is a negation of good governance. We must, therefore, find ways to see that the public sector enterprises are run efficiently, that the role of the public sector as a major entity in the growth process should not be undermined. When Panditji talked about public sector, he had two things in mind. Looking at the history of the capitalist system, he came to the conclusion that the accumulation was at the heart of the process. Therefore, by nationalising profits, by preventing wasteful consumptions of the rich, and the super rich class, you accelerate the tempo of development of the economy. But if you run a public sector like post office socialism, if there are losses, and if you frown on public sector making adequate profits, then you are negating that vision which led Panditji to emphasise the dynamic role of the public sector in our national economy.

Secondly, if you socialise profits -- and profits in a capitalist economy are the single most important source of accumulation, also of income distribution -- you kill two birds with one stone; you accelerate the tempo of accumulation; you also reduce inequalities in income and wealth. But this reduction in income and wealth disparities can take place only if the public sectors make profits. If the public sectors are increasingly used to subsidise many of the consumers who are not so poor, then, I think, we are operating in a manner in which, I think, the public sector cannot play its historic role.

Therefore, Sir, I submit to this august House that while we enact this very historic legislation, we must not forget that eternal vigilance is the price of liberty. In the same way, if this legislation is to yield the desired results, it is necessary that all of us work to ensure that our economy in the next ten years does grow at the rate of seven to eight per cent, that we create a climate for enterprise where both private and public sector investments, including foreign direct investment can find a hospitable place. I think, China today gets fifty to sixty billion dollars of foreign direct investment. We get not more than five to six billion dollars. I know for certain that there are people who want to come and invest in our country. But they complain about our bureaucracy; they complain about our corruption; they complain about the uncertainty of our labour laws. I am not saying they are right or they are wrong. But I think, we, as a nation, have a collective responsibility to set our house in order. And I say so because India is the flavour of the year. This thing cannot last for ever. Let us take advantage of this highnoon tide, this tide which is running in our favour. In the next five or six years, we must use all resources that we can really mobilise, to build top-class infrastructure. When I go to South-East Asia, I look at Thailand; I look at Malaysia; I look at Singapore -- what type of infrastructure do they have!

They were nowhere in the scene when India became independent. Today, in terms of their infrastructure, the quality of their infrastructure, I think, they are way ahead of us. So, I think, we have a limited time to catch up, and this august House, therefore, has the responsibility in this regard. In the same way, if we have to implement successfully the social safety nets of the type which we are putting in place today, then, it is very essential that the fiscal health of the economy must not be under-mined, that all of us must ensure that our public sector enterprises, do, in fact, carry out the mandate, the vision, that characterised the vision of Jawaharlal Nehru. And, I am sure, Sir, if we do that, we will be able to implement not only this programme but many more ambitious programmes of social justice, expanding the network of social safety nets, of ensuring that our children, that our women, that our older citizens do get effective social safety nets to protect them. Therefore, Sir, in requesting this House to endorse this legislation, I thought I would draw the attention of this House to the imperatives which we have to tackle, if processes of governance have to be harnessed to build a new India free from the fear of war, want and exploitation."