Not only Bengal, Centre owes MNREGA funds to many States

The Union Ministry of Rural Development claims funds have been delayed due to procedural problems. 

Updated - July 04, 2022 06:39 pm IST

Published - July 03, 2022 02:48 am IST - NEW DELHI

Women working at an MGNREGA project site in Karnataka. File

Women working at an MGNREGA project site in Karnataka. File | Photo Credit: The Hindu

As on July 1, the Union government owes funds to 15 States under the Mahatma Gandhi National Rural Employment Guarantee Scheme (MNREGA) as per the official data published on the Union Rural Development Ministry website, including West Bengal, where last week workers who haven't been paid for five-months hit the streets.

Since January, the Union Rural Development Ministry has not released any funds to West Bengal, citing procedural lapses including absence of social audits to ensure transparency in implementation of the scheme. The centre owes ₹7,130 crore to the State, out of which ₹2,800 crore is just by way of wages of the workers. However, even in the States that do not have these issues, at the end of the first quarter of the financial year, even the first tranche of MNREGA funds hasn't yet landed.

Take for example Bihar, a state ruled by JD(U) and BJP in this financial year, which has an accumulated dues of ₹2,611 crore. The Union Rural Development Minister Giriraj Singh is an MP from Begusarai, Bihar. The centre had released the last instalment in March, just before the last financial year came to a close. As per officials of the State MNREGA department, out of the total pending amount, ₹701.28 crore are dues that the union government owes to MNREGA workers in the State. This amount has not been cleared since June 7, for over 23 days now. This is in direct violation of the MNREGA ACT, which clearly States that the wages have to be paid within a fortnight.

Madhya Pradesh, another BJP-run State has a similar story. The centre owes the State ₹1,322 crore. As per state Principle Secretary Panchayat and Rural Development Umakant Umrao, while there has not been any substantial delay in the wage component of the MNREGA funds, the dues are largely for the material component, of which the centre bears 60% and 40% the States have to arrange.

The delay in the material component of the MNREGA has a domino impact affecting future projects. “The gram panchayats usually procure the material from local vendors on credit. Everyone expects to be paid on time, but most of these vendors are tolerant of delay of a few weeks. The problem arises when this delay stretches out for longer, they become reluctant to supply material for any later projects. The work cycle thus gets broken,” Mr. Umrao said.

Here is how the delays happen. Chhattisgarh received the last tranche of funds on March 22 2022, just days before the close of the 2021-22 financial year. The centre then expected the State to settle the payments immediately. Prior to the March payment, the centre had released funds five-months back in October 2021. The fund payments despite digital streamlining remains erratic. MNREGA Commissioner Chhattisgarh Qaiser Abdul Haque said that the State has not got any further instalment since March 22 and the State still has ₹150 crore dues pending from the last financial year.

According to senior officials at Union Rural Development Ministry, the payments are stuck because of procedural delays and overhauling of the Public Finance Management System by Union Finance Ministry, which now has compliance requirements. “Every day, we are clearing the dues of various States and the list of outstanding amounts will shrink,” a senior official said.

Professor Rajendran Narayanan, who is the founding member of LibTech India and works at Azim Premji University, said that the delay in releasing funds has become an endemic issue. "Instead of providing adequate funds at the start of the financial year, the union government continues to tinker with the technical architecture of the programme. The workers should not have to pay a price for bureaucratic problems," he said.

The MNREGA funds broadly has three components- wage, material and administrative. The wage bill is borne completely by the centre and is directly transferred to the workers’ bank accounts. As on June 29, as per the numbers deduced from the data available on the government website, Vijay Ram, researcher at People’s Action For Employment Guarantee (PAEG), said that currently the centre owes ₹11,097 crore to workers across the country.

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