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NEW DELHI, Feb 5 (AFP): India is billing its new jobs scheme that promises every rural family 100 days of work a year as a landmark in its battle against poverty but economists say it faces big hurdles.
Chief among them are widespread corruption and the country's poor track record in governance.
There are also concerns that the programme, expected to cost at least nine billion dollars a year, will fuel India's already hefty deficit.
"One is not sure how much of the allocated funds will land up reaching the targeted segments," said Rajiv Malik, economist at JP Morgan in Singapore.
"In terms of the past (anti-poverty schemes), there were a lot of fictitious names on rolls whereby the money simply disappeared," he said.
Prime Minister Manmohan Singh launched the plan last week in the dusty village of Bandlapally in the southern state of Andhra Pradesh, saying its aim was to remove "poverty from the face of our nation."
"This will be a landmark in our history," he said, calling the National Rural Employment Guarantee Act the biggest achievement of his 20-month-old government.
Under the plan, one member of every rural household will get 100 days of work a year in such areas as water conservation, irrigation, flood prevention, road construction, forestry and wasteland development. If no work is available, they will receive unemployment payments.
The scheme is initially being rolled out in one-third of India's 600 districts across the country and is part of the Congress-led government's bid to help the rural poor who helped it to a surprise electoral win in 2004.
The scheme is to be fully operational in five years.
Congress campaigned on a platform of economic reform with a "human face".
The scheme's key architect, Belgian-born economist Jean Dreze who teaches at Delhi School of Economics, said it was long overdue with India's economy booming at eight per cent.
"During the last 20 years or so, the so-called 'middle class' read the top five per cent of the income scale-has become rich beyond its wildest dreams," Dreze said.
Around 60 per cent of India's 1.1 billion population live in the countryside, many in abject poverty.
But other economists say it may not be the best way to beat poverty.
Economists also say the jobs plan could put pressure on the cash-strapped government's finances and widen the country's combined central and state government deficit, which at over nine percent is one of the world's highest.
States will be responsible for 10 percent of the funding.
Finance Minister P Chidambaram has said the scheme will have only a nominal budget impact. The government says it plans to fund the initiative by combining other rural welfare schemes and cutting costs on other programmes.
Despite the difficulties, economists said any programme tackling India's poverty was a good thing.
"Even if only 50 per cent of the funds get through, it will generate an increase in employment and boost infrastructure," said Riyaz Khan of the Mumbai-based Centre for Monitoring Indian Economy.
Mindful of critics who say other poverty-fighting schemes have a poor history in reaching the neediest, the premier said there was a need to "work tirelessly to ensure the benefit of the scheme reaches to the needy people."
India has had a longstanding battle to overcome bureaucratic and other corruption. Also some of the country's poorest states have the worst record on governance.
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