Rs 6,000 crore wage payments pending, FM's package for NREGA workers a 'misnomer'

Counterview Desk
Finance Minister (FM) Nirmala Sitharaman’s announcement of providing an average of Rs 2,000 extra per household through the Mahatma Gandhi National Employment Guarantee Act (NREGA) is a misnomer, NREGA Sangharsh Morcha, a civil rights organization working among NREGA workers has asserted.
This cannot be called an "additional resource", it asserted, pointing out, important reasons why the financial package effectively means "nothing" for NREGA workers as not only their wages do not match the minumum wages, there is continues to be "a significant delay" in disbursing wage payments, too.

Stating that the delay is to the tune 50 days on an average even according by the Central Government, in a statement, it says, for this delay "no compensation is calculated and paid to the workers", which is "a blatant violation of the Act."

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Each state has different NREGA wage rates and they are revised every financial year to account for inflation. The increase in wages was announced three days prior on March 24 to the financial package by the Ministry of Rural Development (MoRD).
The FM claim of the average wage rate of Rs 182 for 2019-20 is the average wage per day per person. As Prof Jean Dreze explains, this is the total 2019-20 wage bill divided by total person days of employment – in other words, an average of wages actually received rather than the average of notified wages.
It is lower than the weighted-average of state-wise notified wages for 2019-20 which is Rs 200, possibly because workers often work on a piece-rate basis. No-one knows what NREGA employment levels are going to be in 2020-21, so the average increase in wages by Rs 20 (182 to 202) is arbitrary.
The FM further assumes that all households will complete 100 days of work and hence earn 20 x 100 = Rs 2,000 more. Only 6.4 percent of households have completed 100 days of work in this financial year.
There has been a 32% reduction in the number of such households which completed 100 days, as compared to last year. This is largely due to administrative negligence causing unavailability of work and extensive delays in payments. It is shameful that in the time of such a crisis the government has intentionally obfuscated the facts to show that they have provided relief.
The issue of stagnating wage rates is not new to NREGA. Although there has been a raise in NREGA notified wages this financial year, they continue to remain lower than the state agriculture minimum wages in almost all the states. NREGA wages should be in accordance with the recommendations of the 7th pay commission.
As on March 28, 2020 the total pending NREGA wages stands at Rs 6,000 crore while pending material payments have mounted to Rs. 9,700 crore. In a letter dated March 27, 2020, the secretary, MoRD had stated that only Rs 4,431 crore has been released to states for clearing the arrears towards wages and material payments. This means that a significant amount of the budget of the financial year (FY) 2020-21 will have to be spent on clearing the arrears of FY 2019-20.

It is shameful that in the time of crisis the government has intentionally obfuscated the facts to show that they have provided relief

FM’s advisory on social distancing norms for NREGA isn’t pragmatic as accessing and working in NREGA involves several processes with significant physical proximity. Many of the state governments have rightly decided to suspend NREGA work temporarily. At such a time it is imperative that the government pays the full notified minimum wage for each day of the lockdown.
There continues to be a significant delay in disbursing wage payments to workers (an average of 50 days) by the Central Government. For this delay no compensation is calculated and paid to the workers. This is a blatant violation of the Act.

NREGA Sangharsh Morcha’s Demands:

Each NREGA worker must be paid the full notified minimum wage for each day of the lockdown. The money should be routed through Gram Panchayats rather than bank transfers in order to avoid overcrowding at rural banks.The payments should be made to all the job card holding families irrespective of their work history.
The recent release of Rs 4,431 crore by the Central government is inadequate for clearing all dues. MoRD should Immediately release all the arrears towards payments of wages and materials for NREGA work and increase the NREGA budget for the following year.
Pay full compensation for delayed payments to the workers immediately. This includes delays in Stage1 by the states in creating the pay order and Stage 2 the delay in transferring the wages by the Central government.
Large numbers of migrant workers have returned to their native villages in light of lockdowns, many more rural residents will need work under NREGA over the next year. In such extraordinary circumstances, the number of days of work per rural household should not be limited to 100 days per year.
The categories of permissible works should also be expanded to include specific individual benefit schemes and construction of community assets.

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