Insisting Everything Is Fine Won't Help the Centre Reduce MGNREGA Wage Delays

Jean Drèze responds to the statement the Ministry of Rural Development issued in response to his recent article on wage delays.

The Ministry of Rural Development (MoRD) recently released a statement countering a recent article of mine on delayed and failed payments of Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) wages. I stand by the article and indeed there is nothing in the MoRD statement that contradicts it.

Nevertheless, a few clarifications may be helpful:

1. I am aware that the MoRD is working hard to reduce delays in MGNREGA wage payments. I did acknowledge that “first-step delays” are going down. Statistics on second-step delays are not in the public domain. If they are also going down, as the MoRD claims, let the MoRD release the data. In any case, I did not claim that delays are getting longer. I did argue that unacceptable delays persist and, more importantly, that the latest payment technologies have created a new generation of payment problems: rejected payments, diverted payments and locked payments. Nothing in the MoRD statement refutes this.

2. I am also aware of the official employment figures. Nothing in these figures refutes anything I wrote. The question remains – are these figures authentic? It is well known that official employment figures tend to be inflated by fudged muster rolls. Judging from independent survey data, the gap between official figures and actual employment declined substantially until 2011-12, the latest year for which independent estimates are available. As explained in the article, my fear is that the gap is increasing again, in some states at least. If so, actual employment may be declining, contrary to official figures.

3. The MoRD statement says: “Contrary to the belief in the article regarding APBS [Aadhaar Payments Bridge System], it is worth mentioning that Aadhar is not an impediment in timely payment of wages”. There is no such “belief” in the article. What I wrote is that Aadhaar-based payment systems such as the APBS have created new problems such as rejected payments, diverted payments and locked payments. I stand by this.

4. The MoRD statement claims that “no conversion of accounts into APBS is done without informed consent of the beneficiaries”. I dispute this strongly. This will be the subject of a separate article. Meanwhile, here is a scanned copy of the form MGNREGA workers are made to sign for purposes of e-KYC in Jharkhand. The “consent” line is in English.

I take strong objection to the MoRD’s assertion that my article “raises issues which do not seem to be based on facts”. The article is based partly on official data, and partly on extensive first-hand experience in Jharkhand. I invite the authors of the MoRD statement to spend a couple of days with me in Jharkhand and see the situation for themselves.

Finally, I reiterate my appreciation of the MoRD’s efforts to resolve a crisis that is not (at least not entirely) of its own doing. But I stand by the statement that unless this crisis is resolved very soon, MGNREGA will be in peril.

Jean Drèze is a visiting professor at the Department of Economics, Ranchi University.

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