In two months after SC order, government does little to ensure timely payment of NREGA wages

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NREGA Sangharsh Morcha statement on government failure to implement the Suprement Court order to ensure timely payment of NREGA wages:

On 18 May, the Supreme Court in the Swaraj Abhiyan Public Interest Litigation (PIL) instructed the Central Government to “prepare an urgent time bound mandatory program to make the payment of (National Rural Employment Guarantee Act) wages and compensation to the workers”. However, so far the Ministry of Rural Development has only organised a consultation on this matter on 27 June, in which no representative of the civil society was invited. In a press release issued on 13 July 2018, the Ministry claimed that it is implementing Standard Operating Protocols for ensuring timely payment of wages. However, these protocols are unavailable in the public domain.

NREGA workers are to receive their wages within 15 days of doing the work, failing which they are entitled to compensation. There are two stages in the processing of wage payments. The first stage comprises of all the steps to be completed within the state/Union Territory (UT), i.e. measurement of work, entry of workers’ attendance in the Management Information System, generation of wage list, generation of Fund Transfer Order (FTOs) and approval of FTOs by the first and second signatories. The second stage includes generation and forwarding of fund release order by the Ministry of Rural Development, crediting of the state account with funds in the sponsor bank and crediting of wages in the worker’s account.

Lack of uniformity in timelines for first stage processes across states

As per the Ministry’s guidelines, FTOs should be approved by the second signatory within eight days of the closing date of the corresponding Muster Roll. (This leaves a week for the completion of the second stage processes). However, as per the Ministry’s own data, only 11 states/UTs follow this rule. Other states allow their functionaries to complete the first stage processes till up to 15 days after the closing date of the corresponding Muster Roll. This subsequently delays the completion of the second stage processes.

Long delays in second stage processes

The PIL forced the Ministry to admit that what it had been touting as the rate of timely payment of wages is in fact only the proportion of FTOs approved on time by the second signatory. The submissions made by the central government to the Court reveal that the rate of timely processing of wages in the second stage is very poor: only 17% in 2016-17 and 43% in 2017-18. Further, information about the second stage delays is unavailable in the public domain.

Denial of compensation

Currently, compensation is only calculated for the delays in the first stage of the wage payment processes. Further, Programme Officers have the untenable discretion of rejecting this compensation. It is thus a matter of little surprise that from 2013-14 to 2017-18, only 4% of the calculated compensation was approved. Further, only 61% of the approved compensation amount was actually paid to workers.

No clarity on rejected payments

Scores of workers do not receive their wages at all. Amongst the various reasons for non-payment of wages, one is rejection of FTO transactions for technical reasons. In the last financial year, 2.4% of the total wage payments – amounting to about Rs 500 crore – were rejected across the country. The year before, the rate of rejection of wage payments was as high as 16%. There are no less than 206 reasons for rejection of wage payments!

These include “closed/transferred/blocked” account, “no such account”, “network failure”, “invalid Aadhaar”, “Aadhaar not mapped” and also a residual category of “miscellaneous”. The Ministry has no document in the public domain which explains the reasons for wage payment rejection or the remedial action to be taken in each case of rejection.


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