At the end of the long wait for wages facing many workers employed under the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS), there remains a long journey to the bank or post office before the cash they earned is placed in their hands. It could be a 30 km trekked by foot, a bus ride alone for women, or a lost day’s work. But in three Madhya Pradesh districts, workers no longer have to make the journey, the cash comes to them.
Vans equipped with a cashier cum clerk and a security guard travel between gram panchayat offices and even, when necessary, MGNREGS work sites, to deliver cash to workers. In Annapur, the six hard-top vehicles — or “mobile banking units,” as they’re called — financed in January 2010 through the district’s central cooperative bank “Apki Bank Aapke Dwar” scheme, helped 730 people receive payment each day that year, according to a PowerPoint promoting the programme.
In it the mobile banking units’ first journeys through the villages are shown. The vans are draped with banners and orange marigolds, with lines of women waiting to receive payment from the clerk through the passenger window.
It’s a sight the Ministry of Rural Development would like to see repeated throughout India, as delayed wage payments persist, particularly among post offices, Minister of Rural Development Jairam Ramesh said. “The entire credibility and value of MGNREGS is threatened by continued delays in wage payments through post offices…” Mr. Ramesh said in a November letter addressed to Kapil Sibal, Minister of Communications & Informational Technology.
In the letter, Mr. Ramesh urged States to use mobile banking vans outfitted with satellite connectivity as a temporary fix to distance and delayed wages as the government works to bring post offices under a core banking solution similar to that found in banks. Under Mr. Ramesh’s proposal, the vans would follow the same milk routes mapped out by dairy cooperatives.
Mobile banking has for years been discussed as a potential solution to the long payment wait, said social activist Nikhil Dey, while government infrastructure still struggles to meet the MGNREGS’ aims. As many as 200,000 gram panchayats throughout India still lack banks where workers can access their wages, he said.
The distance, coupled with administrative snares, as well as understaffed and under-equipped facilities, has led to wage payment delays that run well past the 15 days mandated by the landmark 2005 Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) that seeks to ensure 100 days of work each year for the rural poor. Delays of one month are common, Mr. Dey said, but a single misprinted digit on a job card might result in an “extraordinarily high” wait of two to three years.
“These are people mostly living on a hand-to-mouth existence,” he added. “The whole point was that they would have access to money when they needed it.”
As such, he would like to see the programme tried out in one district in every State.
The scheme is underway in Annupur, Balaghat, and Khandwa districts in Madhya Pradesh’s, said Aruna Sharma, the principal secretary for rural development in the State, where distances between banks have already been reduced to 5 km as the result of the State’s efforts to build 4,000 new small banks and post offices there. The vans make that distance even less — because “why should an individual walk even 5 km?” Ms. Sharma said. The smaller distances have shortened lines at the bank, brought the waiting time for wages from an average of 2 to 3 months to 3 to10 days, and has caused workers to save more of their money.
But Ritesh Saxena, a Management Information System officer in the Ministry of Rural Development (MRD), stressed that the vans would not resolve the wage disbursement problem in the long term. “It’s a good interim solution because nothing else is there,” he said, estimating that the costs of outfitting a single van and paying its staff could run as high as Rs. 20 lakh.
The cash-laden vans might also prove a security hazard in districts affected by Maoist violence, Mr. Dey pointed out. Or, as Neelakshi Mann, a Monitoring and Evaluations Officer in the MRD put it, “they’d be sitting ducks.”
Even Ms. Sharma does not favour the vans as a long term solution. Though she says a van would run the state or the private banks that financed it less money, she still wants to see “brick and mortar” financial buildings in her State far more than roving van banks. There have been cases where business correspondents — the mobile equivalent used by some banks — have taken off with the money, she said. “It is very important for people, when they put their money somewhere, to be confident that it’s a permanent structure.”
Besides, she noted, handing out workers’ wages is only part of the goals of financial inclusion proposed by MGNREGA. At a full service banking facility, the rural poor could do much more to lift themselves from poverty, like take loans, she said. “What we are saying is that they should gain access instead of just having access.”
