Perspectives

to the presence of perverse incentives

Improving the Effectiveness within the administrative and political
system that encourages patron-client re-

of NationalRuralEmployment lationships. The dynamics of this relation-

ship results in bureaucrats and politicians
being accountable, internally or upwards

Guarantee Act to their individual patrons rather than to

the needs of citizens [Saxena 2004 and
Mehta 2003]. In a country such as India,
where the poor rely on the state for basic
Our earlier wage employment programmes failed due to the survival and protection, the consequences
common problems of ineffective targeting, leakages and poor of weak accountability are particularly
quality asset creation, etc. Hence, while developing rules and debilitating. In the absence of account-
ability mechanisms, the poor are unable
guidelines for implementation of the National Rural Employment to interact, influence or exercise enforce-
Guarantee Act 2005, more attention should be paid to the lessons ability upon the state (outside of electoral
we have learnt from past experiences. Because this act has the politics). Thus, when government teach-
potential not only to strengthen social security in India, but also to ers and doctors do not come to work or
when social security schemes do not cover
strengthen community mobilisation, ensure better responsiveness of intended beneficiaries, the poor have no
local governments to community needs and priorities, and most of recourse. Moreover, weak accountability
all enhance governance outcomes. This article is an attempt to encourages corruption. As Rajiv Gandhi
articulate some key design principles that can strengthen the famously said, “of every one rupee spent
effectiveness of the new act. on development only 15 paise reaches the
poor”. The challenge India faces, there-
fore, is to identify processes through which
YAMINI AIYAR, SALIMAH SAMJI right “design”, which will ensure account- accountability relationships are strength-
ability and transparency in the implemen- ened, leading to the state being more

T
he passage of the National Rural
Employment Guarantee Act
(NREGA) in August 2005 saw the
culmination of a lively debate on the merits
and demerits of wage employment guaran-
tee programmes as the appropriate mecha-
nism for social security and, as some would
argue, poverty reduction in India. The act
mandates all state governments to develop
subordinate legislation and schemes for
the provision of at least 100 days of
guaranteed employment (unskilled manual
work) to every rural household in India.
The act identifies panchayati raj institu-
tions (PRIs) as the key implementing body.
Now as bureaucrats go back to the
drawing board to develop rules and guide-
lines for the NREGA schemes, the focus
has shifted to implementation. Concerns
over programme implementation stem from
India’s past experience with wage employ-
ment programmes, including the famous
Maharashtra Employment Guarantee
Scheme (EGS), which suffers from com-
mon problems of ineffective targeting,
leakages and poor quality asset creation.
Consequently, even the act’s, most ardent
supporters agree that in the absence of the
tation processes, the NREGA will not
fulfil its promise and could end up adding
to the fiscal burden of the state.
This paper is an effort to contribute to
the ongoing process of developing rules
and guidelines for implementation within
the state governments. It does so by draw-
ing on lessons learnt from past experience
with wage employment programmes, in
particular the Sampoorna Grameen Rozgar
Yojana (SGRY) – the largest current
national wage employment programme.
Through this analysis, we articulate some
key design principles that could contribute
to strengthening the effectiveness of the
NREGA.
Establishing a Normative
Framework
Accountability and Public Institutions
Observers of contemporary Indian pol-
ity attribute the continued deterioration of
India’s public sector to the failure of
accountability mechanisms in current
governance structures. Many argue that
the mechanisms are weak primarily due
responsive to the needs of the poor.
Given the central role that accountabil-
ity plays in determining the impact of
services delivered through public institu-
tions, it provides a crucial reference point
for articulating design features that could
contribute to NREGA’s success. In the
next section we examine the concept of
accountability. We then use this frame-
work to examine the potential of PRIs, the
chief implementing body of NREGA, to
encourage accountability in the governance
structure. The debate on the PRIs and
accountability provides the starting point
for the discussion on NREGA.
Understanding Public Sector
Accountability
In contemporary public policy discourse,
accountability has been defined as a re-
lationship in which power holders can be
held answerable for their conduct [Goetz
and Gaventa 2001; Goetz and Jenkins 2004;
Bellour and Newell 2002]. Accountability
consists of two elements, “answerability”
(accounting for actions taken) and “en-
forceability” (punishments, sanctions or

320 Economic and Political Weekly January 28, 2006

rewards for actions taken) [Goetz and
Jenkins 2004].
Accountability in public institutions
operates on two levels: horizontal and
vertical.1 Horizontal (supply-side) account-
ability is a relationship where one state
agency monitors the activities of other
state agencies. Institutional oversight and
checks and balances internal to the state
machinery represent this relationship.
Vertical (demand-side) accountability
refers to the relationship between citizens
and the state. Elections are the most con-
ventional form of vertical accountability
[Goetz and Jenkins 2004]. Recent formu-
lations of accountability have expanded
the realm of vertical accountability to
include citizen-based action such as lob-
bying and advocacy. Theorists such as
Goetz and Gaventa (2001) emphasise that
both horizontal and vertical relationships
of accountability must operate in tandem.
This breaks the states’ monopoly over
institutional oversight and ensures that
citizen perceptions contribute to state
policy.
A related concept is that of responsive-
ness. Exercising accountability assumes
that institutions have the capabilities to
respond to those that hold them to account.
Thus accountability requires that a balance
be struck between the capacity of citizens
and horizontal accountability institutions
to demand accountability and the capabili-
ties of power-bearing institutions to re-
spond to these demands. Drawing on the
importance of responsiveness, Caseley
(2003) has defined accountability as en-
gagement (between two actors where
demands are expressed through formal,
accessible and transparent mechanisms),
and responsiveness (the extent to which
the parties upon whom demands are made
takes one or more of three actions: answer-
ability, enforcement and organisational
change) [World Bank 2004].
Synthesising these ideas into a coherent
framework, the World Development Re-
port (2004) identifies four key relation-
ships of accountability: voice (between
citizens and policy-makers or politicians);
compact (between policy-makers and
organisational providers), management (the
relationship between organisational pro-
viders and frontline providers) and client
power (between citizens and organisational
providers) [World Bank 2004]. In this
formulation, horizontal accountability is
reflected in the relationships of compact
and management while vertical account-
ability is reflected in voice and client power.
Economic and Political Weekly January 28, 2006
Crucially, the report identifies five ele-
ments: delegation (of roles and responsi-
bilities), financing (accessing funds to fulfil
roles), performing (nature of performance),
informing (access to information), and
enforcing (ability to sanction, punish or
reward) as central to each relationship of
accountability. Failures in accountability
can usually be traced back to the failures
in one or all of the elements within these
relationships.
For the purposes of this paper, we draw
upon the definition of horizontal and
vertical accountability emphasising the
importance of responsiveness in account-
ability relationships. Within this context,
we examine the different elements of
accountability relationships.
Panchayati Raj through the
Accountability Lens
Efforts at rural decentralisation (follow-
ing the 73rd amendment) in India were
initiated within the context of strengthen-
ing accountability in governance struc-
tures. The argument is that decentralisation
brings governments closer to people
thereby allowing them to respond more
effectively to local needs and preferences.
Moreover, proximity encourages monitor-
ing and enforcement [Faguet 2004;
Khemani 2001]. India’s experience with
decentralisation, however, has been far
from satisfactory. This can be attributed
to the fact that decentralisation has been
“unbalanced”.
Political decentralisation, in the form of
elections has made significant headway
with as many as 3.2 million men and women
now formally part of the political system.
Moreover, the provision for reservations
has had some, albeit limited, impact on
empowering the hitherto marginalised
[Chattopadhyay and Dufflo 2003; Besely
et al 2005]. However, administrative de-
centralisation (understood as the devolu-
tion of the three Fs – funds, functions and
functionaries) has been limited at best.
Studies show that PRIs in India have limited
or no funds to implement functions
devolved to them. Further, their adminis-
trative powers are curtailed because they
are dependent on state government func-
tionaries to fulfil their responsibilities.
The PRIs therefore have no enforceability
over their administrative staff [World Bank
2004a].
In addition to this unbalanced decentrali-
sation, accountability relationships have
not improved. In the absence of clear
devolution of powers and resources, hori-
zontal accountability structures operate in
much the same way as they did prior to
the 73rd amendment since line depart-
ments maintain much of the same control.
Vertical accountability structures too re-
main unchanged and gram sabhas, perhaps
the strongest mechanism for enhancing
citizen voice, are weak [Besely et al 2005].
In the absence of strong accountability
mechanisms oft repeated concerns of weak
capacity, elite capture and corruption at the
PRI level have the potential to further
undermine accountability.
This is not to say that decentralisation
cannot lead to greater accountability.
Rather, decentralisation requires the PRIs
to have clearly assigned functions, be
adequately resourced such that funds follow
functions and have some administrative
powers over their staff. Further, the PRIs
should be provided with the requisite
capacity, while citizens should be ade-
quately equipped to articulate their rights
and enforce their demands on PRIs. It is
only when the PRIs are appropriately
equipped with these powers, resources and
skills that they will have the capabilities
to respond to the needs and demands of
citizens for accountability. Thus, strength-
ening the alignment between the three Fs
and ensuring greater citizen participation
in the local government activities, is es-
sential for decentralisation to fulfil its
promise as a mechanism for enhancing
accountability in public service provision.
In the specific context of NREGA, the
PRIs have been identified as the key
implementing body, in part as an effort to
strengthen PRIs but mostly in order to
ensure accountability and transparency in
the scheme implementation. However, draw-
ing from past experience with PRIs imple-
menting wage employment programmes
as in the case of SGRY, it is clear that
simply assigning responsibility without
adequate resources and capacity will not
lead to any serious improvements in imple-
mentation because accountability is not
addressed.
Lessons Learnt from SGRY
The objective of SGRY is to “provide
additional wage employment in rural areas
as well as food security, alongside the
creation of durable community, social
and economic assets and infrastructure
development” [GoI 2004]. In this scheme,
funds are transferred directly from the state
and central governments to zilla panchayat
321

(ZP)/district rural development agency
(DRDA) which in turn, devolves funds to
the lower tiers of government. Funds are
divided across the three tiers in the ratio
of 20:30:50.2 Wages are set in accordance
with state agricultural minimum wage and
are paid partly in cash and foodgrains. The
gram sabha prepares the annual action plan
(AAP) which is then approved by the ZP/
DRDA. Fifteen per cent of the funds can
be used on operation and maintenance.
The scheme requires compulsory physical,
financial and social audits.
The SGRY guidelines provide for a
strong participatory wage employment
programme. However, recent empirical
work examining the impact of SGRY
suggests that the implementation of SGRY
suffers from some serious pitfalls [GoI
2003, 2005]. These include:
Extensive use of contractors: A recent
evaluation of SGRY undertaken by the
ministry of rural development (MoRD)
finds that 14.3 per cent of officials, across
the states in India, reported the use of
contractors in the implementation of
SGRY. This despite the fact that the
guidelines specifically prohibit the use of
contractors.3 Beneficiary surveys at the
state level suggest that the use of contrac-
tors is even more extensive than the of-
ficially reported amount (Orissa 92.4 per
cent, Kerala 66 per cent and Jharkhand 30
per cent). Contractors are hired either by
line department officials or by PRI mem-
bers and control the entire process right
from identifying works and beneficiaries
to the dissemination of wages (both the
cash and grain component). The repercus-
sions of this are many. First, contractors
hire their own labour from different dis-
tricts. Second, labourers are paid at rates
far below the minimum wage rate. Third,
since profit is the main motivation, in most
cases, contractors identify works that are
machine-intensive and, therefore, hire very
little labour. The presence of contractors
is testament to the weak horizontal rela-
tionships of accountability. There are no
checks and balances between PRI institu-
tions. Moreover, line department function-
aries are not accountable to PRIs. Vertical
relationships of accountability within the
PRI system are weak and as a result citi-
zens are unable to exercise enforceability.
Top-down approach to work identifica-
tion and beneficiary selection: Since re-
sources provided to PRIs are limited, it is
no surprise that line department officials
continue to have a strong presence
in programme implementation. This is
322
All
particularly the case in the states such as
Orissa where the DRDA exists parallel to
the PRI system. Not only has this allowed
for extensive leakages but it also means
that works identified do not reflect local
needs and priorities and that money is
often spent in areas and on infrastructure
that only benefit the local elite. Moreover,
the self-targeting mechanism of the
programme is diluted with officials draw-
ing lists of beneficiaries and presenting
them to the gram sabha. This has a serious
impact on efforts at social inclusion, in
particular, gender. While the guidelines
for SGRY specify that at least 30 per cent
of wage employment opportunities should
be reserved for women, the MoRD study
found that only 12 per cent beneficiaries
are women.
Programme monitoring, social audits and
display boards: Weak vertical account-
ability within the PRI system has meant
that although the programme guidelines
allow for extensive and innovative moni-
toring systems, particularly the social audit
mechanism, these have not been imple-
mented with any degree of success. Social
audit is a process in which the details of
both financial and non-financial informa-
tion, used by public agencies for develop-
ment initiatives, are then shared with
citizens often through a public platform.
Several studies [Gopakumar and
Sreekumar 2004; Sankaram 2004] find that
even when social audits do take place: they
lack a uniform methodology (who partici-
pates? frequency of meetings? quorum
requirement? gender participation? what
process should be followed? how to dis-
seminate information?); there is no stan-
dard format for reports generated; and
beneficiary committees (the locally selected
committees that execute the works) lack
financial, technical and management skills.
Sixty-seven per cent of the beneficiaries
surveyed in the MoRD study reported the
non-existence of beneficiary committees.
Top-down monitoring and evaluation sys-
tems, of course, has meant that muster rolls
and account books can and are regularly
fudged allowing for gross irregularities to
take place. According to the MoRD study,
57 per cent of beneficiaries surveyed
said display boards did not exist at work
sites thus defeating the goal of creating a
transparent scheme.
Delays in the release of grain/finance and
technical sanctions: The Tenth Plan Mid-
Term Appraisal (2005) reports evidence of
gross delays and non-availability of
foodgrains at FCI godowns. The report
Economic and Political Weekly
cites inadequate number of godowns,
high transport costs, cumbersome pro-
cesses and black marketeering as reasons
for the non-availability of foodgrains.
Delays are also experienced at the level of
fund release. The MoRD study shows that
only 45 per cent of the states release funds
within a fortnight of the release of the
central share. Delays are also experienced
at the implementation level. According
to the guidelines, construction of works
can only begin after GPs receive a tech-
nical sanction from the engineer, usually
posted at the block level. In practice, the
receipt of technical sanctions can take
anything between five to over 30 working
days. As a consequence of these delays
there is very little synergy between the
implementation of the programme and the
off-season requirement for labour and
wages. Thus the bulk of programmes tend
to be implemented when most unskilled
labourers have found alternative forms
of employment thereby encouraging the
use of contractors, the construction of
machine-intensive works and in some cases
the inflation of wage rates so as to attract
labourers. Consequently, the benefits of
the programme do not reach its intended
target.
Inappropriate wage setting: Although the
guidelines maintain that wages for SGRY
should be set on the basis of the legal state
agricultural minimum wage, wages are
often modified at the local level. Accord-
ing to the national MoRD study, 48 per
cent of beneficiaries are not aware of the
minimum wage set by the government.
Further, 12 per cent of total beneficiaries
were paid less than Rs 30 while 65 per cent
were paid between Rs 30 and Rs 60. At the
state level, minimum wage paid for skilled
labour ranges from Rs 124 in Punjab to
Rs 41 in Arunachal Pradesh. The minimum
wage paid for unskilled ranges from Rs 84
in Punjab to Rs 35 in Arunachal Pradesh.
This indicates that there is a large differ-
ential between skilled and unskilled wages.
Operations and maintenance/quality of
assets: The MoRD study highlights that
only 28 per cent of the works undertaken
in SGRY adhere to quality specifications
of SGRY. Further, only 31 per cent of the
beneficiaries are aware of the quality
specifications prescribed for the works
under SGRY.
As the above discussion demonstrates,
simply devolving responsibilities without
providing the requisite powers, resources
(three Fs) and capacities to PRIs leads to
a zero sum game. In such circumstances
January 28, 2006
the failure in horizontal and vertical ac-
countability relationships, lead to the weak
implementation as well as poor programme
monitoring. In the context of NREGA,
strengthening accountability relationships
at the PRI level will thus be critical to its
success.
Strengthening Accountability
Relationships
The key question in the design of NREGA
schemes is: How can states ensure that
wage employment programmes are deliv-
ered effectively in an environment prone
to poor accountability, corruption and
inefficiency?
In this section we identify some design
features that state governments could
incorporate into the NREGA programme
guidelines. The emphasis here is on
strengthening those elements that contrib-
ute to stronger relationships of account-
ability. The design features mentioned
below are areas where the states have
maximum discretion in creating the
schemes. Moreover as seen above, weak-
nesses in these areas contributed to some
of the problems experienced with the
implementation of SGRY. Addressing
these, therefore, is crucial for the success
of NREGA.
Wage setting: The act stipulates that un-
skilled workers will be paid the state
agricultural minimum wage subject to a
minimum of Rs 60 per day. The NREGA
has no specifications on the wage differ-
ential by skill set. It stipulates that material
cost, semi-skilled and skilled labour to-
gether cannot exceed 25 per cent of the
total cost per work undertaken.
Resource availability amongst PRIs: The
act allows state governments to determine
the allocation of financial resources across
the PRIs with a minimum of 50 per cent
specifically allocated to the GP. The post
of a programme officer at the intermediate
panchayat (IP) level and district programme
coordinator at the district level has also
been introduced by the act to assist PRIs
with discharging scheme functions.
Information dissemination: The central
employment guarantee council (CEGC) and
state employment guarantee council (SEGC)
have been allocated the responsibility of
promoting widespread dissemination of
the act.
Monitoring systems: The act allows each tier
of government to undertake monitoring at
its level. It also provides for mandatory social
audits to be undertaken by the gram sabha.
Economic and Political Weekly January 28, 2006
Grievance redressal mechanisms: The act
gives the state governments the flexibility
to design its own grievance redressal system
at the IP and district level.
The analysis of the SGRY experience
suggests that there are two key dimensions
that have contributed to the failure of
accountability within the programme de-
sign. These can be identified as process
and programme monitoring (ensuring
compliance).
Monitoring the Process
Transfer Resources to the GP
The NREGA proposes a minimum of 50
per cent of the funds be transferred to the
GP. However, this leaves some ambiguity
on the specific roles and responsibilities
for the different levels of government within
the PRI structure. Because the GP is the
unit of government closest to the people,
we propose a system where the bulk of
resources are transferred directly to the GP
who in consultation with the GS makes all
the major planning and operational deci-
sions. There are three aspects to this:
Operational transfer: The GP should be
responsible for all operational activities
related to the implementation of the
programme. This implies that the GP will
be responsible for the creation of all public
works. As the act stipulates, all annual
action plans should be prepared by the GS.
In addition to the sanctions received by the
DPC and PO, the GS should also have the
authority to sanction annual plans and
budgets for implementation.
Financial transfer: The finances made
available to the GP should be in conso-
nance with the operational responsibility
given to them. In other words, funds must
follow functions. If as we suggest, GPs are
allotted all operational responsibilities, the
funds required would be more than the
minimum 50 per cent stipulation laid down
by the act.
Technical transfer: The PRIs require two
kinds of technical assistance. The first is
administrative. For this, the act creates two
new administrative positions at the district
and IP levels (district programme coordi-
nator and programme officer) to assist
PRIs in scheme implementation. However,
if these positions were restricted to the
state bureaucracy the problems of func-
tionary accountability discussed earlier
remain. This could be avoided through the
introduction of a competitive hiring system
where GPs are allowed to solicit technical
expertise from outside the bureaucracy.
Comparative criteria with civil service
positions would need to be developed by
the state government. Second, the PRIs
will require technical assistance for devel-
oping construction plans, getting sanctions
and developing operations and mainte-
nance strategies. As we discussed in the
section on SGRY this is a point at which
many delays occur. Therefore, the GPs
should be able to outsource technical
expertise as and when necessary. The SGRY
guidelines allowed for this: “In case of
shortage of technical staff or otherwise, it
shall be permissible for the GP to have the
projects technically appraised by private
technically qualified people”.4 However,
state governments have not followed this
provision. When attempted, outsourcing
of technical expertise has proven to be a
successful form of reducing PRI depen-
dency on the bureaucracy and encouraging
accountability between PRIs and their staff.
In Karnataka, for instance, the panchayati
raj and rural development department
created a pool of engineers at the district
level to assist PRIs on a need basis. This
experiment met with some success.
In effect, transferring resources to the
GP ensures the alignment of the 3Fs (in
the specific context of the NREGA
schemes) thereby encouraging strong re-
lationships of accountability, while reduc-
ing the time lag between planning, sanc-
tioning and implementation as well as
strengthening citizen voice.
Capacity-building of GPs
The potential problem of weak capacity
amongst local PRI representatives is well
recognised. Most PRI representatives (par-
ticularly women and SCs/STs that are
elected through the reservation policy) have
little prior experience or understanding of
the governance system. In response to the
capacity gap, SIRDs and NGOs have been
actively involved in training the PRIs.
Despite these efforts, a consistent imple-
mentation and support plan for PRIs is yet
to evolve. Capacity inputs at present tend
to focus on the sectoral capabilities of PRIs
rather than strengthening their capacities
to perform functions generic to local
governments. These include capacities for
financial management (planning, budget-
ing and accounting); procurement proce-
dures; conflict resolution and performance
monitoring. Better financial management
is crucial to ensuring the funds received
through NREGA are utilised effectively.
323
Capacity-building of Gram Sabha
The efficiency of this system is largely
dependent on the effective functioning of
the GS. It could be argued, and often truly
is the case, that the GSs are never held and
if they are largely ineffective, it is because
of low levels of participation.5 One of the
main reasons for poor GS participation is
the fact that citizens feel that GPs have no
power, and therefore, cannot resolve their
problems. In part, this problem is resolved
by giving the GP greater financial powers
for this would automatically ensure that
citizens have a higher stake in the proceed-
ings of the GS. However, this does not
address the problem of the quality of
participation. Often, power relations within
the GS contribute to keeping the poorest
(and in this case the key beneficiary group)
outside the system.
To address this we propose an approach
that aims at encouraging gram panchayats
to hold gram sabhas and improving the
quality of participation in the GS. This can
be achieved through scaling up the role of
state level training institutions such as
SIRDs and NGOs by: (i) improving cur-
rent training modules to focus on the issue
of GS participation, (ii) raising awareness
both at the panchayat and citizen level on
the need and importance of GSs, and
(iii) mobilising community-based organi-
sations (CBOs) around the issue of
holding GSs.
Using Information Technology to
Reduce Time Lags
The use of innovative tools developed
through e-governance can contribute sig-
nificantly towards reducing leakages and
delays in wage payment. There are suc-
cessful examples of “e-governance” such
as the e-sevas in Andhra Pradesh and the
Bhoomi land registration process in
Karnataka. Information and communica-
tion technology (ICT) can be used in
multiple ways to encourage transparency
in NREGA. Job cards, for instance, can
be computerised. Through this computeri-
sation process, GPs and citizens can verify
that beneficiaries with job cards get paid
for the number of days they work.
Lessons can also be learnt from inter-
national experience. For example, in
Namibia, the United Africa Pay Masters
(UPM) introduced a new system that can
be best described as a “mobile bank”,
using ATM machines for the payouts of
pensions to the elderly. Basically, every
324
pensioner is issued with an electronic
identification card with PIN number and
a fingerprint identification, which then
serves as verification by the ATM machine
[Eckhard 2002]. South Africa uses both a
mobile bank as well as post offices to deliver
pensions.6 Such alternative money trans-
fer mechanisms could be explored for
paying wages to beneficiaries in NREGA.
This would serve to further reduce leakages.
Programme Monitoring
Transferring resources to the GP requires
strong monitoring to guard against the
potential of elite capture, patronage politics
and leakages. We propose a three-pronged
approach to monitoring: intergovernmental
monitoring, community-based monitoring
and external monitoring.
Intergovernmental Monitoring – PRI
The NREGA assigns a supervisory and
monitoring role to the ZP and the IP. Here
we address the specific ways in which this
could be done. The ZP and the IP ought
to play an overall supervisory role where
they hold the GP accountable and ensure
that regular and effective gram sabhas take
place. In addition they should also ensure
that social audits take place. Therefore, we
propose the following:
Random visits by ZP on scheduled GS
meeting days: The ZP must undertake
regular supervision visits to GPs on a
random basis to ensure that GPs hold GSs
on agreed upon dates. If they are not held,
then the GP will be liable for a penalty.
Rewards to GPs that hold GSs: Based on
benchmark performance indicators de-
cided upon by the state government. These
could be a combination of monetary and
non-monetary incentives such as press
coverage, grants and awards.
Intergovernmental Monitoring –
The State and PRI
The act envisages a regulatory and su-
pervisory role for the state government in
the form of a (SEGC) and the creation of
a grievance redressal system. We propose
instituting an ombudsman office7 at the
ZP and IP levels that would report directly
to the SEGC. Therefore the SEGC would
receive information from the DPC (com-
plaints register), reports from the presidents
of the ZP and IP, ombudsman offices and
the community-based monitoring system.
In addition, the act also provides for a
Economic and Political Weekly
system whereby the state can take correc-
tive measures. 8
Community-based Monitoring
Here we focus on the demand-side of
improved local governance in administer-
ing NREGA. In particular, the use of:
Social audits: As in SGRY, the NREGA
also mandates that GSs undertake regular
social audits. Audits of this nature, con-
ducted at the local level by communities
have proven to be an innovative way of
holding governments accountable. How-
ever, as SGRY demonstrates, social audits
are futile in the absence of specific guide-
lines and an effective feedback mechanism.
Therefore, it is imperative that the state
should be lay out detailed guidelines on
the process and implementation of social
audits. The NGOs could be used to build
the capacity of the GS in conducting these
audits. The focus would be twofold:
(1) Creating awareness about the NREGA
with respect to its rules and regulations.
In particular, the guarantee of 100 days of
work, the existence of unemployment
allowance, minimum wage to be paid, job
card and the ban on use of contractors. This
coupled with the Right to Information (RTI)
Act 2005 will change the extent to which
citizens and groups can use this informa-
tion to provide an oversight for the
programme officer. (2) Understanding
issues like wage rate, muster rolls, ac-
counting practices, and the procurement of
construction materials. A beginner’s guide
to social audits in the form of a photo
album could serve as a user guide for GSs.
The key lies in institutionalising social
audits as they serve to deepen democracy
by making the GS more effective. The
audit report could be presented at the GS
meeting with a copy sent to the SEGC. To
ensure transparency, social audit reports
should be placed on district websites,
printed in the local newspapers, and be
included in the publication of social
monthly magazines featuring best prac-
tices on social audits in different parts of
the country. In addition, a special learning
website could be created for GPs to access
and share information via e-kiosks.9
Citizen/Community Score Cards
The citizen report cards (CRCs) were
pioneered in India by the Public Affairs
Centre, Bangalore, as a means to strengthen
the interaction between civil society and
the state, while pursuing the mission of
January 28, 2006
improving governance. The methodology
has been used extensively in India, as well
as in several other countries, to pursue a
wide spectrum of accountability and
monitoring objectives.10 For example, in
Bangladesh, Committees of Concerned
Citizens (CCCs) have been formed to assess
the activities of the local providers of
services in their areas.11
With respect to NREGA, the introduc-
tion of CRCs could be used to further
strengthen the role of NGOs in capacity-
building through direct interactions with
the GS and GP. Here, the NGO could act
as the interface between communities and
the local government ensuring that the
planning process is participatory and the
needs do reflect local priorities.
It is the combination of random visits
of ZP officials on scheduled GS meeting
days and the use of community scorecards
that will ensure and further strengthen
the need to hold GSs.
Monitoring Implementation
through IT
Since the NREGA provides for a guar-
antee of at least 100 days of employment,
introducing a well-maintained computer-
ised tracking system will be critical in
reducing leakages in the system. In par-
ticular, it could track job card information,
number of applications submitted, benefi-
ciary lists, number of days of employment
generated, unemployment allowance paid,
and number of complaints received as well
as the action taken. Monthly progress
reports could then be submitted to the
SEGC which would then facilitate moni-
toring the progress of implementation of
the NREGA schemes.
This is indeed a daunting task but critical
to the success of NREGA schemes. If
states find that housing the tracking system
in the PRI structure adds too much burden
on them, they could use colleges to provide
this service. This would have the added
benefit of creating employment for youths
in the state. In states that do have rural
BPOs,12 they could be used to manage the
data that is collected.
The outcome of these community-based
monitoring systems must feed back into
the state management information system
via the SEGC. If no visible corrective
action is taken as a result of the findings,
then there will be no incentive for the
communities to participate in the future.
After all, there is an opportunity cost to
participation.
Economic and Political Weekly January 28, 2006
External Monitoring
With the passing of the RTI Act 2005,
the government has committed itself to an
unprecedented level of transparency.
However legislation alone cannot reduce
leakages in the system. We propose the
following independent measures that will
(i) serve to triangulate the information
received from the community-based moni-
toring, and (ii) feed back into the system
to ensure that corrective measures are taken.
In particular, both NGOs and regional
media can be used in the following ways:
NGOs: The SEGC could contract indepen-
dent NGOs to randomly visit work sites,
write reports and present their findings to
them as well as the GS on a regular basis.
Their terms of reference could include:
adherence to general principles and pro-
cedures of NREGA, quality of infrastruc-
ture built and the participation of villagers,
especially the poor and women. This would
help to triangulate the information received
from other sources (complaints register,
social audits and community score cards)
and would provide a check against the
internal monitoring system. Furthermore,
the reports would enhance the GS’s ability
to monitor public use of funds.
Media: The SEGC could encourage
freelance journalists to make random field
visits to obtain first hand information on
the de facto implementation reality. This
could be in the form of commissioned
articles, investigative reporting or general
information pieces. To ensure the use of
local language, state and district news-
papers should be targeted. In effect, this
would enhance free media’s role in being
a “public watchdog” by reporting on the
private appropriation of public resources.
In the international arena, Indonesia’s
Kecamatan Development Programme uses
journalists to monitor its implementation.
This has been an effective mechanism in
following up reported corruption cases
and highlighting the resolution in these
cases. It has also had a direct impact on
policy-makers by pressuring them to take
corrective action.13
Conclusion
The emphasis in our recommendations
lier on two key features that could signifi-
cantly contribute to strengthening account-
ability relationships in the NREGA.
First we argue for a clear separation of
functions across tiers of government. Thus,
as discussed above, the GP is responsible
for all operational activities (with some
support from the ZP and IP) whilst the state
government is responsible for overall
monitoring and regulation of the process.
Within the PRI structure, the ZP and IP
would also have a role in monitoring. Of
course, resources (both financial and ad-
ministrative) must follow functions. Such
a system allows the GP flexibility to re-
spond effectively to citizen needs and
priorities without depending on any exter-
nal authority. It also prevents tiers of
government from passing responsibility
for performance on to one another, as is
common in the present system. Finally, a
strong system of overall monitoring will
ensure process compliance.
The second feature that we emphasise is
the central role that citizens must play in
monitoring the provision of public ser-
vices. Crucial here is the regular flow of
information and the enhanced ability of
citizens to exercise enforceability through
tools such as social audits and community
score cards.
Many in India argue that the NREGA
is one of the most important pieces of
socio-economic legislation passed in re-
cent times. Indeed, if done right, the
NREGA has the potential not only to
strengthen social security in rural India,
but also to strengthen community mobili-
sation, ensure better responsiveness of local
governments to community needs and
priorities, and most of all enhance gover-
nance outcomes. However, the key lies in
getting the design right. EPW
Email: aiyar_y@yahoo.com
Notes
1 Theorists have identified many forms of
accountability – upward, downward, external
or internal, political managerial. We focus on
horizontal and vertical as it encompasses
the key ideas we want to address. We address
other forms of accountability within this
context.
2 ZP:IP:GP
3 Guidelines: Sampoorna Grameen Rozgar
Yojana (2004), section 5.16.1
4 6.10.6 SGRY guidelines.
5 For more on this see Besely T et al (2005).
6 see http://www.cgap.org/SAfricaRemittances/
5.html
7 Seventeen states have created Lok Ayukta
(ombudsman office) to address corruption.
Karnataka has evolved a role for the ombuds-
man office to address corruption in service
delivery.
8 Articles 25 and 26 NREGA, stipulates that a
fee of Rs 1,000 can be levied if a district does
not comply with the set guidelines.
325
 9 A financially viable way would be to leverage
existing ITC services in district (e g, ITC
e-choupals and e-kiosks).
10 For more information, see http://www.pacindia.org;
S Paul (2002) and G K Thampi (2005).
11 For more information see
http://www.ti-bangladesh.org
12 Lason is working in Tamil Nadu and Byyraju
foundation has Gram IT models in Andhra
Pradesh.
13 KDP Phase 2 results, World Bank, September
2004.
References
Bellour, S and P Newell (2002): ‘Mapping
Accountability: Origins, Context and Impli-
cations for Development’, IDS Working Paper
No 168, www.ids.ac.uk
Besely, T , R Pande and V Rao (2005): ‘The
Political Economy of Gram Panchayats in
South India: Drawing Policy Implications from
a Research Project on Democratically Elected
Village Governments’, World Bank. http://
www.cultureandpublicaction.org/bijupdf/
panchayatreport.pdf.
Caseley, J (2003): ‘Blocked Drains and Open
Minds: Multiple Accountability Relationships
and Improved Service Delivery Performance
in an Indian City’, IDS Working Paper No 211,
www.ids.ac.uk
326
Chattopadhyay, R and E Dufflo (2003): ‘The
Impact of Reservation in Panchayati Raj:
Evidence from a Nationwide Randomised
Experiment’, Poverty Action Group, MIT.
Eckhard, S (2002): ‘Namibia’s Universal Pension
Scheme: Trends and Challenges’, International
Labour Office.
Goetz, A M and J Gaventa (2001): ‘Bringing
Client Voice and Client Focus in Service
Delivery’, IDS Working Paper No 138,
www.ids.ac.uk
Goetz, A M and Jenkins (2004): ‘Accountability’
in Adam Kuper and Jessica Kuper (eds),
The Social Science Encyclopedia, Routledge,
New York.
Gopakumar, V and G S Sreekumar (2004):
‘Citizens Charter: A Tool for Social Auditing’,
Working Paper, Grameena Patana Kendram
Karakulam, Thiruvananthapuram.
Faguet, J P (2004): ‘Does Decentralisation Increase
Government Responsiveness to Local Needs?
Evidence from Bolivia’, Journal of Public
Economics, 88, pp 867-93, www.elesiver.com/
locate/econbase
GoI (2003): ‘Concurrent Evaluation of Sampoorna
Grameena Rozgar Yojana (SGRY) in All
Districts in India’, Ministry of Rural
Development, Government of India.
– (2004): Guidelines – Sampoorna Grameen Rozgar
Yojana, Ministry of Rural Development,
www.rural.nic.in
– (2005): ‘Concurrent Evaluation of Sampoorna
Economic and Political Weekly
Grameen Rozgar Yojana (Orissa)’, Ministry
of Rural Development, Government of India.
– (2005): Tenth Plan Mid-Term Appraisal,
Planning Commission,
www.planningcommission.nic
Khemani, S (2001): ‘Decentralisation and
Accountability: Are Voters More Vigilant in
Local than in National Elections’,
www.worldbank.org
Mehta, P B (2003): ‘The Burden of Democracy’,
Penguin.
Paul, S (2002): ‘Holding the State to Account:
Citizen Monitoring in Action’, Books for
Change.
Sankaram, P N (2004): ‘Gaps in Transparent and
Corruption Free Decentralisation: Some
Reflections on Kerala’, Working Paper, St
Joseph’s College of Business Administration,
Bangalore.
Saxena, N C (2004): ‘Improving Delivery of
Programmes through Administrative Reforms
in India’, www.nac.nic.in
Thampi, G K (2005): ‘Ensuring Effective Project
Monitoring and Evaluation in Tsunami Relief
Operations: Exploring the Role of Community
Feedback Mechanisms’, Public Affairs
Foundation.
World Bank (2004): ‘India: Fiscal Decentralisation
to Rural Governments’, Oxford University
Press.
– (2004a): ‘Making Services Work for Poor
People’, Oxford University Press.
January 28, 2006