The Employment Guarantee Act is a diluted version of the original proposal. Will it be effective?

Amartya Sen calls it cause for jubilation. Giving some of the poorest people in the country a reliable source of income through 100 days of guaranteed employment can be an enormously important instrument for improving their well-being, says the Nobel laureate.

Thursday was Congress member Rahul Gandhi's day in Parliament.

Skirting commitments on all controversial issues like Special Economic Zones (SEZs) and the Indo-US Civil Nuclear Agreement, the government today made it clear that pro-people, inclusive social and economic policies alone would be pursued in the last year of its five-year term. The President's address to the joint session of Parliament, traditionally a summary of the government's activities during the previous year and its priorities for the coming year, spelt out only those issues on which there was parliamentary consensus. Therefore, while showcase schemes like the expansion of the National Rural Employment Guarantee Programme and the Sarva Shiksha Abhiyan were held up as ways in which the government had embraced the poor, contentious issues like Left extremism, land reforms and labour legislation were not even mentioned in the speech. Much was made of Bharat Nirman, the National Rural Health Mission and the Jawaharlal Nehru Urban Renewal Mission. This was made possible, the government said, because of the performance of the Indian economy that has grown at close to 9 per cent per annum for four years in a row. "The historically high investment rate, of over 35 per cent of GDP, and savings rate, of over 34 per cent of GDP, symbolise a new dynamism in our economy,' the government said in the address, adding that this was all the more creditable against the background of high international oil prices and rising commodity prices. The government said the Indian consumer would continue to be insulated against high international costs of food commodities and oil, putting paid to any tinkering in the duty structure and subsidies in oil and gas. The government said outlays on agriculture, health and rural development had been tripled and together with education, these sectors account for more than half of the Central Gross Budgetary Support as compared to less than one-third in the Tenth Five-Year Plan. "This is a major structural shift in Plan priorities, aimed at reducing disparities and empowering people,' the address said. It added that attention had been focused on areas like agriculture and the target set in the National Common Minimum Programme, of doubling agricultural credit in three years, had been exceeded. However, the government did not commit itself on the implementation of the Radhakrishna report on rural indebtedness. Conscious that it was under fire on the issue of agricultural prices, the address said the government had effected "an unprecedented steep hike of over 50 per cent in the Minimum Support Price (MSP) for wheat and about 33 per cent for paddy in the last four years'. Specific sectoral successes like the legislation for unorganised labour, increase in the level of minimum wage from Rs 66 to Rs 80 per day, increase in the eligibility limit for payment of bonus to workers from Rs 3,500 to Rs 10,000 per month, and the National Rehabilitation and Resettlement Policy for people displaced from their land due to development projects, were also mentioned as landmark schemes. Despite the prime minister's repeated warnings on the performance of the power sector, the President's address only patted itself on the back for allotment of coal blocks with the capacity to support 68,000 Mw of power generation and the identification of nine sites in for setting up coal-based Ultra Mega Power Projects (UMPP) with capacity of 4,000 Mw each. Nor was there any mention of when additional spectrum would be allotted for the telecom industry, even as the government announced that the Indian telecom sector had emerged as the fastest growing in the world with the addition of over 7 million subscribers per month. On SEZs, the address said the government had already provided direct employment to about 100,000 people, with indirect employment estimated at twice as much. "They have attracted investment of over Rs 50,000 crore, and are expected to generate exports of Rs 67,000 crore this year,' the address said. Meanwhile, the third front declared that the President's speech skirted around major problems facing the country, including that of continuing farmer suicides and inflation. The United National Progressive Alliance (UNPA) leaders said they had support of UPA allies CPI(M) and CPI in their attempts to raise these issues in the public realm. According to the Samajwadi Party general secretary Amar Singh, CPI(M) leader Prakash Karat and CPI leader A B Bardhan will be participating in a UNPA-sponsored dharna on farmer suicides to coincide with the presentation of the railway budget on Tuesday.

Surely car owners who get cheap petrol and rich farmers who get free water and power can't be aam? With the general elections due next year, there are obvious pressures on the finance minister to provide goodies for the aam aadmi. There are calls to abandon, or at least postpone by a few years, the fiscal deficit ceilings prescribed by the Fiscal Responsibility and Budget Management Act, so that funds are not a constraint. (If most of us believe that many politicians are corrupt, they reciprocate by believing that the best way to get the vote is by bribing the voter.) Given the concern about the aam aadmi in the bleeding hearts of our political masters, I have often wondered who exactly this aam aadmi is

Chidambaram may try to shift attention from high prices of essentials If everybody, including political parties, is talking about farmers it must be election time. Close to election, it has become more or less a trend for the government of the day to announce sops for the agriculture and rural sectors in its budget proposals. So even while the common man has to swallow the bitter pill of the "inevitable' petrol and diesel hike before the 2008-09 budget, there is a promise of a "populist budget' for farmers and the aam garib aadmi this year. Low growth rate With several States going to the polls this year ahead of the next year's Lok Sabha election, there may be an attempt to shift the attention from the high prices of essential commodities, low growth rate (2.3 per cent in the 10th Plan) in agriculture, the disconnect between a high Gross Domestic Product and the rural sector, with problems of displacement, migration, unemployment, suicides by farmers and impending food crisis. This budget is most likely to convey the last ditch attempt of the Congress-led United Progressive Alliance (UPA) government to redeem itself from the scars caused in the countryside by farmer suicides and dispossession of rural families on account of Special Economic Zones and other industrialisation projects. Without doubt, the Debt Relief Package for Institutional Loanee Farmers (as reported first in The Hindu) and the expansion of the National Rural Employment Guarantee Act (NREGA) Programme will be at the centre of Finance Minister P. Chidambaram's budget proposals. Fertilizer policy Besides, it is expected that he will unveil a rationalised fertilizer policy to encourage balanced use of fertilizers, especially muriates, to revive farm soil. Some succour is also essential for the wives of indebted farmers who committed suicide. There is a growing demand to strengthen the National Agriculture Insurance Scheme (NAIS) and to have a Health Insurance Scheme for farm households, as various surveys showed that most the credits in the informal sector were not only farming related but also to meet the requirements of health, celebrations and even life-style. From all accounts, the pilot weather-based crop insurance may be expanded. Fund requirements It is estimated that the total fund requirement for the expansion of the NREGA from the present 330 districts to 600-odd will be about Rs. 16,000 crore. On the other hand, the debt relief, covering an estimated 35 per cent farmers who had availed themselves of bank loans, is estimated at Rs. 40,000 crore in the first year. The Union government will pay off the dues to banks. A Price Stabilisation Fund is also proposed to be set up with contributions from the government, banks and farmers. Well-placed sources hinted that the Finance Minister may cull out unspent funds from social sectors such as rural development, education and health to partially meet the requirement of the Farmers' Debt Relief Package. It is anybody's guess if the Minister will reduce the interest rate on farm loans from the current 7 to 4 per cent as recommended by the National Commission on Farmers. There is also a demand to raise the credit limit under the Kisan Credit Card scheme. There is an expectation that enhanced budgetary support will continue for the flagship rural programmes, including the swarozgar yojana (self-self groups), Pradhan Mantri Gram Sadak Yojana, Indira Awas Yojana and the Drinking Water Supply programme. The highest increase, however, is expected in the Land Resources Programme under the Integrated Wasteland Management Programme. In the agriculture sector, allocation has to be enhanced for the Rashtriya Krishi Vikas Yojana to enhance production and productivity and to the National Food Security Mission to increase the output of rice, wheat and pulses. Both schemes are new and yet to take off. Irrigation schemes, horticulture mission and agriculture research will get the customary support, as growth in farm "allied sectors' comes from these areas. The National Rainfed Area Authority is most certainly likely to get financial support. Food subsidy The food subsidy bill is likely to cross the Rs 30,000 crore-mark. This is due to the wide difference between the minimum support prices (MSP) paid to farmers and the central issue price of grains sold through the Public Distribution System, as well as on account of the food grains import bill. The subsidy bill to go up further as the food grain stocks are expected to dwindle by April 1, possibly resulting in more imports. With apprehensions of an avian influenza pandemic, a comprehensive rehabilitation package for the poultry industry and bird flu-affected farmers, as part of a Bio-Security Policy, will be announced in the budget, if not earlier. However, the package may include only such poultry farmers, who get linked to institutional poultry farms and the industry. It remains to be seen how the government's packages will play out for the thousands of those in the informal sector who do not have the income and the collateral to avail themselves of institutional loans. Funds utilisation It is expected that in this last year of the UPA government's regime, the emphasis will be on consolidation, with focus on better implementation, monitoring and utilisation of funds. In particular, the Congress has shown signs of being zealous of taking credit for the central funds made available to States, to reap a harvest during election time. The biggest challenge, however, is making agriculture viable for the 82 per cent small and marginal farmers and bailing them out of the clutches of the informal system of borrowing.