The delays in NREGA wage payments are not just operational hurdles — they reflect a deliberate attack on the scheme.

Reports of prolonged delays in NREGA wage payments have been pouring in from all over the country in recent months. The reports are truly alarming, with delays of several months becoming the norm in entire districts and even States. Worse, there are worksites where labourers have lost hope of being paid at all (we found some in Khunti district, Jharkhand). This is not very different from slave labour.

Under the National Rural Employment Guarantee Act, workers must be paid within 15 days. Failing that, they are entitled to compensation under the Payment of Wages Act — up to Rs. 3,000 per aggrieved worker. However, except in one isolated instance in Jharkhand, compensation has never been paid.

Even small delays often cause enormous hardship to workers who live on the margins of subsistence. How are they supposed to feed their families as they wait day after day for their wages, clueless on how long it will take and powerless to do anything about it? A recent investigation of hunger deaths in Baran district, Rajasthan, found that delays in NREGA wage payments were partly responsible for the tragedy. Timely payment is, literally, a matter of life and death — all the more so in a drought year.

It is often argued, especially by government officials, that the main reason for the delays is the inability of banks and post offices to handle mass payments of NREGA wages. There is a grain of truth in this, but as a diagnosis of the problem, it is quite misleading. First, the current “jam” in the banking system is the Central government’s own doing. It reflects the hasty and top-down switch to bank payments imposed about a year ago. As far back as October 2007, members of the Central Employment Guarantee Council warned against this and advocated a gradual transition starting with villages that are relatively close to the nearest bank.

Secondly, the delays in banks and post offices are by no means immutable. In fact, the main obstacle (opening millions of accounts in a short time) is already behind us. In a few States like Rajasthan, the volume of NREGA payments is certainly a continuing challenge. But in most States, these would be quite manageable with suitable arrangements on the part of banks and post offices. In Khunti, we found that payments were easy to expedite with a little help from trained volunteers who accompanied workers to the banks. In Andhra Pradesh, there is a clear protocol for payments through post offices, with strict timelines and constant monitoring. According to this monitoring system, I am told, 70 per cent of the wages are paid within 15 days.

Thirdly, the delays are not confined to the banking system. Very often, it takes more than 15 days for “payment orders” to be issued to the banks by the implementing agencies (for example, the gram panchayat). Thus there are lapses outside the banking system too. For the local administration, blaming the banks is a convenient way of passing the buck.

On closer examination, various hurdles appear to contribute to the delays. These include delays in work measurement (themselves linked to the tyrannical behaviour of the engineering staff), bottlenecks in the flow of funds (sometimes bringing NREGA to a halt in entire blocks), irresponsible record-keeping (such as non-maintenance of muster rolls and job cards), and, yes, hurdles related to bank payments. But I venture to suggest that behind these specific hurdles is a deeper “backlash” against NREGA in many areas. With bank payments making it much harder to embezzle NREGA funds, the whole programme is now seen as a headache by many government functionaries: the workload remains but the “inducements” do not. Aside from the possibility of foot-dragging, slowing down wage payments is a convenient way of sabotaging NREGA, because it makes workers themselves turn against the programme. That was certainly the situation we found a few months ago in Khunti, where workers had started deserting NREGA worksites. This backlash, I surmise, is the real reason why massive delays have emerged around the same time as the transition to bank payments. Seen in this light, the delays are not just operational hurdles — they reflect a deliberate attack on NREGA.

The Central and State governments, for their part, seem to be in denial mode. In Delhi, the Ministry of Rural Development has a vague awareness of the delays, but little to show by way of factual evidence or remedial action. When the Ministry’s attention was drawn to the morass of wage payments in Khunti district, the Deputy Commissioner was asked to take action and certify that no wages were pending. She sent the certificate (in writing) within a few days. It turned out to be based on nothing more than empty assurances from the Block Development Officers, who have no credible data on wage dues. A recent social audit in Khunti showed that rampant delays persist to this day. Ostriches are alive and well in Jharkhand.

Instead of addressing this emergency, the Ministry is lost in a maze of confused proposals about “NREGA-2.” The real meaning of this term became clear on August 20, 2009, when the Ministry was expected to unfurl the NREGA-2 blueprint on the occasion of Rajiv Gandhi birth anniversary. This blueprint boiled down to an architectural sketch (hastily prepared by the School of Planning and Architecture) for “Rajiv Gandhi Seva Kendras,” to be built in all gram panchayats as one of the “core activities” under NREGA. This is a strange idea, especially in a drought year — pucca buildings are not even on the list of permissible works. Perhaps someone thought that putting the Gandhi tag on NREGA across the country would please the political bosses and help the ruling party reclaim the programme. The recent rearrangement of the Central Employment Guarantee Council, with some very able members being shown the door to make room for Congress MPs and friends, was in the same genre. A better way of winning credit for NREGA would be to make it work, starting with timely wage payments.

Insofar as the Centre has any answer to the problem, it seems to be based on the “business correspondent” model, whereby bank agents will go around villages to make cash payments recorded through hand-held electronic gadgets. This solution, however, is based on a wrong diagnosis — that the main problem is the distance that separates many villages from the nearest bank. Distance is certainly an issue in some areas but it has little to do with the delays. In any case, the need of the hour in a drought situation are not futuristic experiments but is immediate acceleration of payments.

Ending the delays is not a simple matter. The first point to note is that, as things stand, there is no in-built alert in the event of delays, let alone any in-built pressure to act. Programme Officers at the block level typically have no data on delays in wage payments. The workers, for their part, have no way of airing their grievances. This is one aspect of the general lack of grievance redress provisions in NREGA; or rather, of the sidelining of these provisions on the part of Central and State governments — in this case by ignoring the compensation clause. Activating this clause (along with Section 25 of NREGA, which provides for penalties on anyone who does not do his or her duty under the law) would be of great help in accelerating wage payments.

Aside from this, other effective measures can be taken. Piece rate work could be replaced with daily wage work in drought-affected areas, to dispense with the cumbersome process of work measurement. In any case, wages could be paid on the basis of attendance wherever work measurement is not completed within, say, seven days. Buffer funds can be provided to gram panchayats and post offices, to avoid bottlenecks in the flow of funds. Clear timelines are required at every step of the payment process, along with close coordination of the NREGA machinery with banks and post offices. Job card entries need to be made at the worksite, so that workers have proof that wages are due. Partial advances, in cash at the worksite, could also be considered. And, of course, wage payments need to be meticulously tracked.

These are just a few examples of possible steps to reduce delays in wage payments. The first step, however, is to recognise the problem and give it overwhelming priority. The absence of that is the big stumbling block today.

(The author is Visiting Professor at Allahabad University and member of the Central Employment Guarantee Council.)


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