40% MGNREGA wage payments for April, May still pending

Centre taking 26 days to clear payment orders generated by States: study

June 01, 2021 02:46 am | Updated 02:46 am IST - NEW DELHI

Almost 14% of MGNREGA wage payments from April are still pending more than a month later, while 60% of May payments are also pending, according to scheme data. A recent study of the MGNREGA wage transactions in Jharkhand shows that while the States are generating fund transfer orders without delays, it is the Centre which is dragging its feet in making payments, taking three times longer than it should.

However, although Tamil Nadu has one of the highest rates of wage payment pendency according to the scheme’s Management Information System (MIS) data, the State’s rural development officials say the information has simply not been updated.

The lifeline

At a time when rural India is facing the brunt of the second wave of the pandemic, with the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) acting as a lifeline for those losing livelihoods and facing increased health expenses, activists say delayed wage payments are unconscionable.

The MGNREGA payment process consists of two stages. In the first stage, once the work is completed, a Fund Transfer Order (FTO) is generated by the State and digitally sent to the Centre. In the second stage, the Centre processes the FTOs and transfers wages directly to the workers’ accounts. According to the scheme’s guidelines, Stage 1 must be completed in 8 days and Stage 2 must be completed within 7 days after that. Thus, a worker should expect to get paid 15 days after the closure of a muster of work.

MIS data show that, as on May 30, of the 6.4 crore wage payment transactions whose FTOs were generated in April and May, more than 2.5 crore, or 40% were still pending. The MGNREGA website showed that 99% of FTOs in these two months had been generated within 15 days of work being complete, indicating that State governments had not caused the major delays.

Disputes MIS data

However, Tamil Nadu Rural Development Secretary K. Gopal disputed the MIS data on the State, which showed a high 77% rate of pendency, including 100% pendency for May transactions. “As per my information, the PFMS [or Public Financial Management System] is to be updated by the Government of India. Actual position is not reflected. The wages have been fully settled up to May 20, and are due for the remaining period only,” he said.

Researchers at LibTech India examined a random sample of more than 1.43 lakh transactions in 26 blocks of Jharkhand. Overall, the State has a 54% pendency rate, according to the MIS. They found that in 50% of transactions, the second stage alone took 26 days to complete, more than three times the stipulated seven-day period. Nearly a quarter of transactions took more than a month to be processed by the Centre, said the study.

“The delays violate the law, which stipulates payment within 15 days and also stand in contravention of the Supreme Court’s May 2018 orders. The Centre must calculate the delays and pay compensation to the workers for the full extent of delays, in both stages of the payment process,” said Rajendran Narayanan, assistant professor at Azim Premji University and a co-author of the LibTech report.

“It’s unusual for such delays to occur in the first part of the year, when the scheme should be flush with funds. Currently, the Centre does not calculate or pay compensation for Stage 2 delays. But as far as the worker is concerned, if they don’t get the money, it doesn’t matter whether the delay is the fault of the State or the Centre,” said Sakina Dhorajiwala, who co-authored the report. “If there is such uncertainty about wages, it affects demand also, at a time when the MGNREGA work is desperately needed in rural India.”

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