Home Business & Finance Fighting Poverty Together: Rethinking Strategies for Business, Governments, and Civil Society to Reduce Poverty
Right to Work
NREGS supporters argue that the program has monumental significance and reinforces the rights-based approach to development. Social rights, including the right to work, are provided for in the Indian Constitution but have not been legally enforceable. Recently, there has been a movement to make these rights legally enforceable, such as the Right to Education Act and NREGS. Political Scientist Rajeev Bhargava sees it as significant that NREGS was enacted in a “climate of hyper-antistatism . . . where state intervention in the economy is routinely scoffed at—where the welfare state is widely subjected to moral and economic critique and the market reigns supreme, expected to address even the basic subsistence needs of the people.”54 It is pressure from below that led the government to enact NREGS. “No form of accountability is more direct than elections.” Aruna Roy, social activist and member of the NREGS Council, argues that one of the major benefits of NREGS is that it has strengthened the democratic system at the grassroots level and increased the bargaining power of the poor. NREGS could mark a pivotal turning point for a new regime of social policy. Many social activists “look at NREGS as not merely giving rise to wage employment but leading to equity, food self-sufficiency, and sustainable livelihoods in rural India. We believe that NREGS affords an unprecedented opportunity for governance reform at grass roots.”55 This is consistent with the discussion in Chapter 4 that giving a voice to the poor is a central aspect of the development process.
When evaluating the impact of NREGS, one should also put expectations into perspective. Even though it is a large program, its budget accounts for less than 0.5 percent of India’s GDP. It alone should not be expected to cure the problem of rural poverty in India. Even The Economist writes, “Despite such flaws, the NREGS is winning praise from unexpected quarters.” The magazine Foreign Policy concludes that “the program isn’t simply extraordinary because of its scale—though incredibly, it could affect 70 percent of India’s 1.1 billion citizens. What makes the program truly exceptional is its transparency.” On the whole, NREGS seems to be effective and has the potential to have greater impact in the future.
Business must play a large role in poverty reduction by providing beneficial products to the poor and by creating employment opportunities. But, markets occasionally fail and sometimes produce more inequality than society considers desirable. These two reasons provide a strong rationale for the role of the government in poverty reduction. First, government must regulate markets to protect vulnerable consumers, especially the poor. Second, more importantly, the government has a major responsibility to ensure that the poor have access to various public services such as education, public health, sanitation, and infrastructure. Finally, cash transfers linked either to some conditions or to manual work are gaining support from different parts of the political spectrum, and becoming increasingly popular in many countries.
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