Centre gives massive budget for MGNREGA, states say not enough for even delay compensation

Representational image. Source: Wikimedia Commons

More than half the delay compensation rejections in 2017-18 are due to “insufficient funds”. Centre says no paucity of funds, states just being careless. 

The Centre may claim it is funding the flagship Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) sufficiently, even allotting a massive budget of Rs 48,000 crore this fiscal, but a lack of funds seems to be affecting the scheme on the ground, so much so that it is being cited as the reason for beneficiaries not being compensated when their payments are delayed.

According to data available with the Rural Development Ministry, which oversees the functioning of this scheme, more than half the delayed compensation payable in days – 57 per cent – has been “rejected” so far in 2017-18.

Of this, 54 per cent was rejected due to “insufficient funds” while another 36 per cent was rejected because compensation was not due. The rest fell in categories such as “natural calamities” and “others”.

MGNREGA, introduced in 2006, promises 100 days of employment every year to each rural household. The act stipulates that payments have to be made within a fortnight of completion of work, failing which workers need to be paid compensation for each day of delay.

The ministry has been focusing its efforts on correcting the delays and has even issued circulars in the past to all states claiming there would be “zero tolerance for delays in wage payments”.

It has already instituted a delay compensation system, under which workers are entitled to receive compensation at a rate of 0.05 per cent of unpaid wages per day for the duration of delay beyond the 16th day, with penalties being imposed on officials identified as being responsible for the delay.

To be sure, this phenomenon is not new and the Central government has clearly been unable to ensure adequate funds-flow to the lower tiers for timely payment of wages and delayed compensation.

In fiscal 2016-17, 75 per cent of the delayed compensation payable in days was rejected, of which 35 per cent was due to insufficient funds.

The corresponding figure for 2015-16 was 55 per cent and 59 per cent, for 2014-15 it was 61 per cent and 81 per cent and for 2013-14 it was 21 per cent and 91 per cent respectively. Data for earlier years was not readily available.

While states seem to be grappling with the issue funds to clear the backlog of payments, even rejecting crucial payments like delayed compensation, the ministry claims there is absolutely no shortage of funds.

“We ensure adequate funds reach all states. There is absolutely no paucity of funds from the Centre,” said Aparajita Sarangi, Joint Secretary, MGNREGA.

“A reason among the given choices have to be ticked by the competent authority at the block/state level for rejecting delayed compensation and ‘insufficient funds’ is often just ticked without it being the appropriate column. We are trying to release funds to all states as soon as possible,” she said.

The ministry also claims the Fund Transfer Order that is generated at the state level as a demand to the Centre for transferring the payment often comes with a lag which affects data and shows lack of funds.

“This is not a question of allocating inadequate funds for the scheme. It is a high profile scheme and enough budgetary allocations are made, if not for anything else then for optics. However, this is a matter of being unable to streamline the fund-flow system and ensure the funds reach where required. This is also a reflection of intent,” said another ministry official who did not wish to be identified.

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