Five Paise To A Rupee

Rediff reports:

Congress leader Rahul Gandhi on Thursday said that even five paise of a rupee spent by the Centre is not reaching the intended beneficiaries, as he launched a fresh attack on the Mayawati government.

“I remember my father had once said that only 17 paise out of a rupee reach people. Now the situation is even worse,” Gandhi said while addressing a rally on the second day of his tour in the Bundelkhand region of Uttar Pradesh.

“The Centre could send money and develop schemes. But in the absence of a delivery system here (Bundelkhand), it has no meaning. I have seen that not even five paise out of a rupee reach here,” he claimed.

Gandhi, of course, is speaking in the context of Bundelkhand, trying to score cheap political points off Mayawati. But does he really imagine that public spending schemes work anywhere in the country? Should it not be obvious that the way our system is designed, the way its incentives are structured, inefficiency and corruption are not merely probable, but absolutely inevitable?

I hope Gandhi is honest enough with himself to ask some hard questions here. He may then realise that his drive to get the NREGS extended throughout the country was a mistake, based on nothing but good intent. I’d written about it at the time here, and Mint recently evaluated some new findings on how the scheme is (not) working.

Yet, despite all this evidence on how the NREGS is such a disaster, the scheme still has its defenders. On that subject, read Nitin Pai and Ravikiran Rao (1, 2).

(Rediff link via email from BV Harish Kumar.)