Higher work demand and Greater Timely Payment of wages in MGNREGA

An article by Dr. Jean Dreze, in Indian Express on July 13, 2018 highlights four issues pertaining to the implementation Mahatma Gandhi National Rural Employment Guarantee Act.  

  1. Fall in demand for work because of lower wage rate.
  2. Delayed payments & rejected payments and less compensation to workers owing to delayed payments.
  3. Technological interventions including National Electronic Fund Management System (Ne-FMS) and Aadhar Payment Bridge System (APBS) leading to further delay of payments.
  4. Inadequate Grievance Redressal System

The contentions above given in the article are far from reality. The facts are presented hereunder-

The table below gives information regarding person days (PDs) generated /work done in the last 3 financial years and current financial year (so far). It clearly shows that the person days generated has been very high compared to most of the years.

Financial Year

Person days generated

 (in crore)

2012-13

230.45

2013-14

220.36

2014-15

166.2

2015-16

235.14

2016-17

235.6

2017-18

234.26

2018-19 (so far)

78

This indicates that there is no decrease in demand for work under the programme. In the first quarter of financial year of 2018-19 with the Prime Minister’s thrust on water conservation, 78 crore person days (PD) has already been generated. There is no sign of slowing down or reduction in demand because of wage rates. Infact, the proposal of indexation of MGNREGS wages to Consumer Price Index (Rural) is under examination in the Government. On account of National Food Security Act (NFSA), availability of subsidized food grains and low food inflation rate, the increase in wages as per CPI(AL) has been modest.

As regards timely payment of wages and payment of compensation there has been marked improvement in the last two years. The NREGASoft monitors generation of payment of wages within 15 days. From 34% in FY 2013-14 it has significantly improved to 93% in the current FY; it was 85% in FY 2017-18. In the current FY, due to sincere and effective monitoring, over 70% of payment has reached the Bank accounts of beneficiaries within the stipulated 15 days. In order to further improve the timeliness in wage payments, the Ministry has taken concrete steps like drafting Standard Operating Protocols (SoP) for ensuring timely payments and bringing down the percentage of rejected transactions. Such Protocols are currently under implementation. Owing to over all efforts of Centre and the States, the percentage of rejected transactions from 16% in FY 2016-17 has come down to less than 2% at this juncture. It is worth mentioning that increasing expenditure is being made under the programme which is amply clear from the table below.

Financial Year

Total Expenditure

(In  Rs. Crores)

2015-16

44002.59

2016-17

58062.92

2017-18

64029.74

2018-19 (so far)

21888.68

Compared to yesteryears amount of compensation paid has taken a big leap. Since 2014-15 till date Rs.83.45 crore has been made.  Besides, the Ministry has constituted a committee with representatives from 5 States, various banks and Public Financial Management systems (PFMS) to ensure timely payment of wages and to take steps for removal of  all bottlenecks pertaining to payment of wages. The committee has started meeting regularly. NREGASoft is under upgradation and SoPs have been finalized by the Ministry for timely payment.

Contrary to the belief in the article regarding APBS, it is worth mentioning that Aadhar is not an impediment in timely payment of wages. And no conversion of accounts into APBS is done without informed consent of the beneficiaries. Electronic Fund Management Systems (e-FMS) and bringing in Aadhar are helping in minimizing corruption by making the implementation system more transparent, accountable and efficient. Along with Geo-tagging of assests, DBT payments have reduced leakages. The Institute of Economic Growth (IEG) Study 2017 had found only 0.5% assets as unsatisfactory. There was evidence of increase in productivity, acreage, income and water table through MGNREGS National Resource Management (NRM) works.

As regards, the Grievance Redressal System it is worth mentioning that Social Audit has received a major thrust from Government. 26 States have established Social Audit Units (SAUs) and trained around 4500 staff in these SAUs. Auditing Standards have been duly prescribed in collaboration with Comptroller and Auditor General of India (CAG). Secondly, a Standard Operating Procedure (SoP) for handling Grievances is under implementation by the States since April 2012. Many of the States have come up with Toll –Free Helplines to attend to grievances of stake holders.

The article raises issues which do not seem to be based on facts. There is huge demand for work under MGNREGS and the Government is committed to meeting the demand and ensuring timely payment of wages.

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APS/SNC/AS

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