Anatomy of a Central Scheme: Understanding Accountability in MNREGA

Vivake - November 9, 2011

Over the last couple of weeks, MNREGA is back in the spotlight. The Union Minister for Rural Development wrote to certain states regarding potential misuse of funds, and it was announced that rural development schemes are open to CAG audit. In large schemes like MNREGA, officials at all levels of government - central, state, district, block, panchayat - have roles to play. This can make it difficult to locate the responsible authority in case implementation issues arise. We list the responsibilities of different government agencies involved in implementation of MNREGA in the Table below.

Stakeholder		Responsibilities
Gram Sabha	(a) recommending works; (b) conducting social audits on implementation every six months; and (c) functioning as a forum for sharing information.
Gram Panchayat	(a) planning works; (b) receiving applications for registration; (c) verifying applications; (d) registering households; (e) issuing job cards, (f) receiving applications for employment; (g) issuing detailed receipts; (h) allotting employment within 15 days of application; (i) executing works; (j) maintaining records; (k) convening Gram Sabha for social audit; and (l) monitoring implementation at the village level.
Intermediate Panchayat	(a) consolidating Gram Panchayat plans into a Block plan and (b) monitoring and supervision at the block level.
Programme Officer (PO)	(a) ensuring work to applicants within 15 days; (b) scrutinising Gram Panchayat annual development plans; (c) consolidating proposals into a Block plan and submitting to intermediate panchayat; (d) matching employment opportunities with demand for work at the Block level; (e) monitoring and supervising implementation; (f) disposing of complaints; (g) ensuring that Gram Sabha conducts social audits; and (h) payment of unemployment allowance.
District Panchayat	(a) finalizing district plans and labour budget; and (b) monitoring and supervising at district level.
District Programme Coordinator (DPC)	(a) ensuring that the scheme is implemented according to the Act at the district level; (b) information dissemination; (c) training; (d) consolidating block plans into a district plan; (e) ensuring that administrative and technical approval for projects are obtained on time; (f) release and utilisation of funds; (g) ensuring monitoring of works; (h) muster roll verifications; and (i) submitting monthly progress reports.
State Employment Guarantee Council (SEGC)	(a) advising the state government on implementation; (b) evaluate and monitor implementation; (c) determining the "preferred works" to be taken up; (d) recommending the proposal of works to be submitted to the state government; and (e) prepare an annual report to the state legislature.
State Government	(a) wide communication of the scheme; (b) setting up the SEGC; (c) setting up a State Employment Guarantee Fund; (d) ensuring that dedicated personnel are in place for implementation, including Gram Rozgar Sahayak, Programme Officer, and technical staff; (e) ensuring state share of the scheme budget is released on time; (f) delegation of financial and administrative powers to the DPC and Programme Officer if necessary; (g) training; (h) establishing a network of professional agencies for technical support and quality control; (i) regular review, monitoring, and evaluation of processes and outcomes; and (j) ensuring accountability and transparency.
Central Employment Guarantee Council	(a) advising the central government on MNREGA matters; (b) monitoring and evaluating implementation of the Act; and (c) preparing annual reports on implementation and submitting them to Parliament.
Ministry of Rural Development	(a) ensuring resource support to states and the CEGC; (b) regular review, monitoring, and evaluation of processes and outcomes; (c) maintaining and operating the MIS to capture and track data on critical aspects of implementation; (d) assessing the utilization of resources through a set of performance indicators; (e) supporting innovations that help in improving processes towards the achievement of the objectives of the Act; (f) support the use of Information Technology (IT) to increase the efficiency and transparency of the processes as well as improve interface with the public; and (g) ensuring that the implementation of NREGA at all levels is sought to be made transparent and accountable to the public..
Source: Operational Guidelines, National Rural Employment Guarantee Scheme, Ministry of Rural Development.

Policy

Arguments regarding FDI in retail

Vishnu - December 4, 2012

After months of discussion, the issue of FDI in retail is being deliberated in the Lok Sabha today. In September 2012, the Cabinet had approved 51% of FDI in multi-brand retail (stores selling more than one brand). Under these regulations, foreign retail giants like Walmart and Tesco can set up shop in India. Discussions on permitting FDI in retail have focused on the effect of FDI on unorganised retailers, farmers and consumers. Earlier, the central government commissioned the Indian Council for Research on International Economic Relations (ICRIER) to examine the impact of organised retail on unorganised retail. The Standing Committee on Commerce also tabled a report on Foreign and Domestic Investment in the Retail Sector in May, 2009 while the Department of Industrial Policy and Promotion (DIPP) released a discussion paper examining FDI in multi-brand retail in July, 2010. Other experts have also made arguments – both in support of, and in opposition to, the move to permit FDI in retail sales. The table below summarises some of these arguments from the perspective of various stakeholders as collated from the above reports examining the issue.

Stakeholder	Supporting arguments (source)	Opposing arguments (source)
Unorganised retail	No evidence of impact on job losses (ICRIER). The rate of closure of unorganised retail shops (4.2%) is lower than international standards (ICRIER). Evidence from Indonesia and China show that traditional and modern retail can coexist and grow (Reardon and Gulati). Majority of small retailers keen to remain in operation even after emergence of organised retail (ICRIER).	Unorganised retailers in the vicinity of organised retailers saw their volume of business and profit decline but this effect weakens over time (ICRIER). Other studies have estimated that traditional fruit and vegetable retailers experienced a 20-30% decline in incomes with the presence of supermarkets (Singh). There is potential for employment loss in the value chain. A supermarket may create fewer jobs for the volume of produce handled (Singh). Unemployment to increase as a result of retailers practicing product bundling (selling goods in combinations and bargains) and predatory pricing (Standing Committee).
Farmers	Significant positive impact on farmers as a result of direct sales to organised retailers. For instance, cauliflower farmers receive a 25% higher price selling directly to organised retailers instead of government regulated markets (mandis). Profits for farmers selling to organised retailers are about 60% higher than when selling to mandis (ICRIER). Organised retail could remove supply chain inefficiencies through direct purchase from farmers and investment in better storage, distribution and transport systems. FDI, in particular, could bring in new technology and ideas (DIPP).	Current organised retail procures 60-70% from wholesale markets rather than farmers. There has been no significant impact on backend infrastructure investment (Singh). There are other issues like irrigation, technology and credit in agriculture which FDI may not address (Singh). Increased monopolistic strength could force farmers to sell at lower prices (Standing Committee).
Consumers	Organised retail lowers prices. Consumer spending increases with the entry of organised retail and lower income groups tend to save more (ICRIER). It will lead to better quality and safety standards of products (DIPP).	Evidence from some Latin American countries (Mexico, Nicaragua, Argentina), Africa (Kenya, Madagascar) and Asia (Thailand, Vietnam, India) reveal that supermarket prices for fruits and vegetables were higher than traditional retail prices (Singh). Even with lower prices at supermarkets, low income households may prefer traditional retailers because they live far from supermarkets, they can bargain with traditional retailers and buy loose items (Singh). Monopolistic power for retailers could result in high prices for consumers.

Source: ICRIER [1. "Impact of Organized Retailing on the Unorganized Sector", ICRIER, September 2008]; Standing Committee [2. "Foreign and domestic investment in retail sector", Standing Committee on Commerce, May 13, 2009]; Singh (2011) [3. "FDI in Retail: Misplaced Expectations and Half-truths", Sukhpal Singh, Economic and Political Weekly, December 17, 2011]; Reardon and Gulati (2008) [4. "Rise of supermarkets and their development implications," IFPRI Discussion Paper, Thomas Reardon and Ashok Gulati, February 2008.]; DIPP [5. "Discussion Paper on FDI in Multi-brand Retail Trading", Department of Industrial Policy and Promotion, July 6, 2010]

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Anatomy of a Central Scheme: Understanding Accountability in MNREGA

Arguments regarding FDI in retail

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