On Dumb Editors... And Dumber Rockers

The news that the World Bank has spoken against the National Rural Employment Guarantee Scheme (NREGS) has attracted wide attention. The World Bank says that the NREGS acts as a hindrance to rural-urban migration – which should actually be encouraged if we are to meaningfully tackle widespread poverty.

It is interesting that the Economic Times, in an editorial today, has lambasted the World Bank and supported the NREGS. Our good old Reichwing press all over again.

In terms of basic economic theory, the NREGS makes no sense. Governments tax and spend – or print money. If this money is used to “create jobs” in one area, then it simultaneously destroys jobs in another. If taxpayers don’t pay taxes and spend their money themselves, they too create jobs – and these jobs are created for those who satisfy discerning consumers. NREGS jobs produce nothing worthwhile. They are just “workfare” schemes.

Further, in one avatar or another, the NREGS has been with us for more than three decades. It started off as the Jawaharlal Nehru Rozgaar Yojana, became the Indira Gandhi Rozgaar Yojana, and now it is the NREGS. For 30 years “employment generation schemes” have achieved nothing for the poor. Rather, they have converted the district administration into a “spending bureaucracy”: before this, they were “collectors” of tax revenue, and offered a title deed against taxes paid. The famous “steel frame” was corroded by these employment generation schemes.

All this money should be spent elsewhere – especially on roads. The term “infrastructural bottlenecks” has also been with us for more than 30 years. We do not have roads because all the revenue is being wasted. Without roads, our cities are overcrowding, and satellite towns are not growing. This hurts the poor – who seek niches in the urban market economy.

Unlike the Economic Times, which is flying the pirate’s flag – the NREGS is the “flagship programme” of our The Pirate Ship of State – Mint has come out with a thoughtful editorial today, arguing for spending on real infrastructure. They too quote the World Bank:

The World Bank’s chief economist Justin Yifu Lin said recently, “The only mantra now is to remove infrastructure bottlenecks so that the economy is ready for a high growth path when global revival takes place.”

I am all for closing down the NREGA and suchlike schemes, privatizing all the PSUs, and investing the entire Public Treasure in roads. But I repeat myself. This is the only way we can catch up with China, now leagues ahead of us in every way, as this article argues.

However, the sad story is that not one of our political parties is talking this language. Whether Tweedledum wins, or Tweedledee, or Tweedledumber, central spending policies are going to be the same. The PSUs will stay. The infrastructure of roads will never be built.

I therefore find the new song of the Bangalore rock band Thermal and a Quarter titled “Shut Up And Vote” exceedingly stupid. There is no one to vote for. Indians needs the None of The Above Vote – NOTA.

Thermal and a Quarter should be asked to Shut Up And Think.