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As NREGA funds dry up, wage dues mount

Maitri Porecha New Delhi | Updated on January 28, 2020 Published on January 28, 2020

Though the Seventh P ay C ommission recommends an average wage of close to ₹692 per person per day for unskilled labour, NREGS on an average pays six times less at ₹181.59/day for 42 days of employment per household   -  Mohd Arif;Mohd Arif

‘Despite the job scheme’s success in boosting disposal income in rural areas, government intentionally ignoring it’

With Central funds for paying workers under the National Rural Employment Guarantee Scheme (NREGS) drying up, wage dues are accumulating, Public Financial Management System (PFMS) data accessed from the Ministry of Rural Development’s NREGS portal show.

As on January 27, 91 per cent of wages, involving 2.03 crore transactions running to ₹2,802.59 crore, were pending for the current month. In December, 53.87 per cent was pending, involving 1.3 crore transactions, running to ₹1,765.78 crore. In October and November, the pendency hovered between 29 and 32 per cent.

“Every financial year, from the third quarter onwards, funds for NREGA dry up. As a result, work slows down and delays in wage payments escalate. Every year, about 20 per cent of the NREGS budget is used to clear arrears. This cycle continues and adversely affects workers in the peak season in the final quarter,” said Debmalya Nandi, a public policy researcher and member of NREGA Sangarsh Morcha.

While the Seventh Pay Commission recommends average wage per person per day for unskilled labour at close to ₹692, NREGS on an average pays six times less at an average of ₹181.59 for 42 days of employment per household. By that measure, NREGS produces an annual income of ₹7,626 for a household. NREGS had aimed to provide upward of hundred days of employment.

“NREGA wages increase disposable income in rural areas. This in turn boosts demand and increases consumption. However, the government is intentionally ignoring the programme, year after year,” Nandi further said.

A study conducted by the Centre for Budget Governance and Accountability and Tata Trusts validates the fact that fund flow of NREGS dips drastically in the last quarter for certain districts like Krishna in Andhra Pradesh, for instance. While Krishna recorded the highest share of expenditure at 58 per cent in the first quarter of 2018-19, this dipped to 5 per cent in the last quarter.

Also, the study notes that NREGS accounts in most of the blocks across districts showed negative balance. “The district administration spent in excess of the funds received. NREGS in 2017-18 and 2018-19 shows more than 100 per cent utilisation in Chandrapur, indicating that the previous year’s liabilities were shown as expenditure even though the payments are made in subsequent financial year,” it says.

Breaching legal guarantee

Supporting data related to liabilities is available in the Outlays and Outcomes section of the NREGS portal. Of the cumulative expenditure of ₹44,237.69 crore for 2019-20, up to 21.63 per cent or ₹ 9,572.65 crore have been spent towards clearing the liabilities of the previous years.

In 2017-18 budget actuals, the Ministry of Rural Development spent ₹55,166.04 crore towards full wages of unskilled labour and for up to 75 per cent contribution towards building material. In 2018-19, the allocation was slightly less at ₹55,000 crore, while the revised budget for the same year later stood at ₹61,084 crore. In 2019-20 budget estimates, yet again slightly lesser allocation of ₹60,000 crore was made.

Experts have been demanding that budgetary allocation for NREGA should be between ₹88,000 crore and ₹1.12 lakh crore, on the basis of multiple estimates, in order to meet the legal guarantee of 100 days of work for every rural household demanding work and to ensure timely payment of wages.

While the Ministry of Rural Development (MoRD) claims to have made progress in timely wage payments, large delays in wage payments still plague the programme. “The MoRD says that 75 per cent of payments are credited in 15 days, but statistics show that once funds start drying up in October, this ratio falls significantly,” said Nandi.

Payments to Puducherry are pending since September onwards, while for Tamil Nadu, Rajasthan, Punjab and Karnataka payments are pending since October. In other major States, including the North-East, pendency has accrued since November onwards, Nandi added.

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Published on January 28, 2020
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