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Nowadays a huge controversy is going on in Parliament, the media, academic circles, and elsewhere in India, over the replacement of the MNREGA scheme introduced in 2006 by the Congress party led UPA government, by the VB-G RAM G Bill, 2025 introduced by the presently ruling BJP led NDA government.
These measures were purportedly directed towards alleviating the massive unemployment problem in India. However, I submit that both these schemes are nothing but stunts, gimmicks, and legerdemains. Let me explain.
The Congress led UPA government introduced the MNREGA scheme, by a Parliamentary Act in 2006, to guarantee 100 days paid work to one member of every family in India.
https://en.wikipedia.org/wiki/Mahatma_Gandhi_National_Rural_Employment_Guarantee_Act,_2005
https://www.myscheme.gov.in/schemes/mgnrega
I submit this whole MNREGA scheme introduced by the Congress led UPA Government was a hoax, an artifice, skulduggery, creating illusions and fantasies, and it led to massive corruption. It was built on a false premise, and total lack of knowledge of economics. Jobs cannot be created artificially like this; otherwise, the government may as well announce that it will give Rs 10,000 pm to every person in India who is willing to sweep the streets in cities or rural paths in the country.
Jobs are created when there is rapid growth in the economy i.e. rapidly increased industrialisation.
But for increase in industrialization, there has to be rise in the purchasing power of the masses, for after all the goods produced must be sold. But how can they be sold if the people are too poor, and lack much purchasing power ? So the problem is not how to increase production ( that can easily be done as we have a huge pool of engineers, technicians, and scientists, and immense natural resources ), but how to raise the purchasing power of the Indian masses ?
In 1914, Henry Ford raised the wages of his workers (in the plant manufacturing his Model T cars ) from $2.25 to $5 per day. That was of course done to stabilise his workforce, but it did raise the purchasing power of the American masses, as other American manufacturers were compelled to do the same. However, it is unlikely that Indian businessmen will do likewise.
In the Soviet Union, rapid industrialization began in 1928 after the adoption of the First Five Year Plan. The methodology adopted by the Soviet leaders was broadly this : the government fixed the prices of all commodities and every two years or so lowered them by 5-10 per cent; sometimes wages were also increased by 5-10 per cent. Thus, even with the same wage, the worker could now buy more goods, as prices had been reduced. This way, the purchasing power of the Russian masses was increased by state action, and thus the domestic market steadily expanded.
Simultaneously, production was also stepped up, and the increased production could be sold as people had more purchasing power. This process went on steadily after 1928, resulting in the rapid expansion of the Soviet economy and the creation of millions of jobs, wiping out unemployment.
This took place at the time of the Wall Street slump of 1929, which was followed by the Great Depression in America and most of Europe, with thousands of factories closing down and millions becoming unemployed.
https://www.hastakshepnews.com/2024/09/understanding-economic-challenges.html
This is not to say that India must adopt the same technique as the Soviet Union for raising the purchasing power of the masses. The point is that this can only be done by state action, not through private enterprise.
This, however, can only be done in another political system, not the present one which we have in India. What that system can be, which can raise the purchasing power of the masses and grow the economy rapidly, is for our patriotic thinkers to find out.
As regards the VB G RAM G scheme 2025, it no doubt introduces many changes in MNREGA e.g. 125 days work is guaranteed instead of 100, the Central Government will bear only 60% of the expenditure, instead of 100% as in MNREGA, etc
However, to my mind, these are only cosmetic changes. The basic objection to this new scheme is the same as it is to MNREGA. Jobs cannot be created artificially like this.
VB G RAM G is as much a sleight of hand, jugglery, mountebankery, and cozenage as MNREGA
