The National Rural Employment Guarantee Act (NREGA) payments process has become no less than a technical conundrum which has not only resulted into workers’ predicaments but also diminished local accountability. The payments process is such that the workers will have no one to hold accountable for when their payments get delayed or in case of non-payments.
It has not only become an agonizing compulsion for the workers to work and then hopelessly wait for payments for a long time, but the centralized process has burdened local Panchayati Raj Representatives, who have no power to solve for the issues of payments.
The NREGA payments system is divided into two stages by the Centre. The payments generation stage at the local level is defined as stage-1 and the release of payments by the central government to the worker’s bank account is termed as stage-2.
Stage 1 comprises of different processes at the local level and is a responsibility of the local administration. In stage 1, the filled muster rolls (daily attendance sheets of the workers) need to be entered in the Management Information System [MIS] and collated in the form of a “wage list”( worker wise wage payment information) and several such wage lists are collated into different fund transfer orders (FTO) for processing of payments in different batches.
Subsequently the fund transfer orders need to be digitally signed by the authorized signatories. In most states panchayat secretaries are the first signatory while the second signatory is the Block Development officer. However, many states have also authorized panchayat heads (mukhia or sarpanch) as second signatories (which means they have the authority to sanction payments).
Once the FTO is digitally signed by the two authorized signatories, the stage-1 of payments processing system ends and stage-2 begins. In stage-2, the Central government requires to process the fund transfer orders from their end using National Electronic Finance Management System (NEFMS) through a single bank, directly to the workers account.
The central website shows that bulk of the payments are “generated” within 15 days. Which practically means that the stage-1 processes are being completed within 15 days. However, as per the Act, the entire payments process needs to be done within 15 days from the end date of the muster roll and the workers should get their payments within these 15 days.
Currently as on 7th September, 43% of Payments for the month of August are pending from the Central government as per the Report No R.8.8.1 in the official website, which involves about Rs.2846cr of wages but the same website shows that 99% payments have been “generated” on time.
Time and again the government has been referring to this data to claim that “all is well” in NREGA payments. However, workers across the country wait for a long time for their payments, beyond the stipulated timeline of 15 days.
The Supreme Court in 2018 had directed the union government to show the full extent of delay in payments on the website and pay compensations to the workers accordingly. However, the current reports on the website do not reflect the total number of transactions delayed beyond 15 days.
Instead, the ministry has come up with a report called Stage-2 tracking which shows the volume of pending payments from the central government at any given point but does not reflect the delays beyond the stipulated timelines. Once the Centre starts releasing ( even if they do it after considerable delays, violating the Act), the report will show reduced pending transactions and amounts.
An independent social advocacy group called Libtech recently studied the payments in Andhra Pradesh. Its published report reveals that the Centre takes 26 days on an average to process payments from their end (Stage-2). Adding the average time taken for stage-1 processes, the report reveals that the total time taken to credit the wages into worker’s account is 29 days on an average.
The group has studied all payments for all job cards for FY 2019-20, 2020-21 and up to July 31, FY 2021-22 in 130 Gram Panchayats of Andhra Pradesh (which is 1% of total number of Gram Panchayats in the State).
Adding more complexities to the issue, the government very recently introduced a caste-based payments processing system
This report clearly indicates that the extent of delay is significant. However, the government has been in denial. It is also not clear why the ministry does not put the data for extent of delays clearly in the public domain and instead use technical nomenclatures and processes which only mislead citizens.
In 2018, the Central government had stated in the Supreme Court that only 17% in 2016-17 and 43% of the payments in 2017-18 were paid on time (i.e. within 15 days), which means they keep a track on the exact delays but purposely do not place the report in the public domain.
Adding more complexities to the issue, the government very recently introduced a caste-based payments processing system wherein the fund transfer orders will be segregated into three different caste categories, i.e. SC, ST and Others, and will be processed separately.
This arrangement is unnecessary and likely to further delay the processes. While the government should simply focus on making on-time payments to all those who have worked under the programme, the Centre seem to be experimenting needlessly with workers' hard earned money.
The Centre time and again has claimed that all payments glitches have been resolved through Aadhaar-based payments systems. However, contrary to the claim of the Union government, the introduction of Aadhar into the NREGA payments system has proved to be detrimental and has created several challenges in ensuring on time payments to the workers.
The issues of misdirected payments (money being credited to someone else’s account instead of the worker), rejection of payments due to Aadhaar de-linking by the banks are some of the puzzling issues which are new add-ons to the various other causes of NREGA payments delays.
Also, the issues of NREGA payments are not limited to the matter of Aadhaar linkages and it has deep connections with the quality of local implementation. The government might want to claim success to promote the use of Aadhaar in social welfare programmesm but facts do not corroborate the Central claims.
Almost 70% of the centrally allocated funds have been exhausted this year (as on August 31, 2021) and payments have been delayed almost by a month, at-least twice within the first five months. In such circumstances, the ground implementation will be significantly slowed down in the absence of adequate allocation and on-time release of payments.
The Centre should ensure decentralized mechanisms for payments where local Panchayati Raj representatives will have more power in the payments processes as well as in dealing with grievances regarding payments. NREGA, when conceived in 2005, was considered to be a programme which can deepen the local democratic processes and promote decentralization.
However, the current over-centralization has not helped to smooth up local governance of the programme. The official website shows that 43% (worth Rs 2846 crore) of the August payments were pending as on September 7, 2021.
In 2018, the Central government had stated in the Supreme Court that only 17% in 2016-17 and 43% of the payments in 2017-18 were paid on time (i.e. within 15 days), which means they keep a track on the exact delays but purposely do not place the report in the public domain.
Adding more complexities to the issue, the government very recently introduced a caste-based payments processing system wherein the fund transfer orders will be segregated into three different caste categories, i.e. SC, ST and Others, and will be processed separately.
This arrangement is unnecessary and likely to further delay the processes. While the government should simply focus on making on-time payments to all those who have worked under the programme, the Centre seem to be experimenting needlessly with workers' hard earned money.
The Centre time and again has claimed that all payments glitches have been resolved through Aadhaar-based payments systems. However, contrary to the claim of the Union government, the introduction of Aadhar into the NREGA payments system has proved to be detrimental and has created several challenges in ensuring on time payments to the workers.
The issues of misdirected payments (money being credited to someone else’s account instead of the worker), rejection of payments due to Aadhaar de-linking by the banks are some of the puzzling issues which are new add-ons to the various other causes of NREGA payments delays.
Also, the issues of NREGA payments are not limited to the matter of Aadhaar linkages and it has deep connections with the quality of local implementation. The government might want to claim success to promote the use of Aadhaar in social welfare programmesm but facts do not corroborate the Central claims.
Almost 70% of the centrally allocated funds have been exhausted this year (as on August 31, 2021) and payments have been delayed almost by a month, at-least twice within the first five months. In such circumstances, the ground implementation will be significantly slowed down in the absence of adequate allocation and on-time release of payments.
The Centre should ensure decentralized mechanisms for payments where local Panchayati Raj representatives will have more power in the payments processes as well as in dealing with grievances regarding payments. NREGA, when conceived in 2005, was considered to be a programme which can deepen the local democratic processes and promote decentralization.
However, the current over-centralization has not helped to smooth up local governance of the programme. The official website shows that 43% (worth Rs 2846 crore) of the August payments were pending as on September 7, 2021.
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*With NREGA Sangharsh Morcha
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