Notwithstanding the higher trend of economic growth achieved since the reforms process began in 1991, there has been a shortfall in employment creation. The Ninth Five year plan envisaged labour force growth of 53 million and, assuming 7 per cent GDP growth, employment growth by 54 million persons.The economy has failed to grow at a trend rate of 7 per cent and unemployment has grown. At the same time recent adjustment of the 55th round results of the NSS have indicated that rural poverty has fallen by much less than originally supposed. The situation is worse in the rural sector where stagnation of investment for several years has left it with poor employment potential.The National Rural Employment Guarantee Bill seeks to address these issues. Raghav Gaiha, a well-known expert on EGS, has used results from his own research to demonstrate the important flaws in design and implementation of this scheme (‘No 100 per cent guarantee’, IE, December 20). In addition by diverting funds to this programme against a backdrop of severe fiscal deficit pressures, policy has ensured that there will be even less for investment in productive employment growth in agriculture.Professor Gaiha is right to suggest that this bill is misconstrued policy.The writer is executive director, Australia South Asia Research Centre, Australian National University, Canberra
