Labour

MGNREGA Funds Frozen? 99% of Wages Remain Unprocessed for April 2018

"As inadequate funds should not be a problem at the beginning of a financial year, the reason for the current non-processing is not clear," said the NREGA Sangharsh Morcha.

New Delhi: That the Mahatma Gandhi National Rural Employment Guarantee Act has been beset by problems since it was launched is not a secret. From the disbursal of wages, to different wages in different states and even no work for those dependant on the scheme, the list of ailments is endless.

In the latest, the NREGA Sangharsh Morcha, an organisation agitating for the rights of workers covered under MNREGA, has highlighted in a letter how 99% of MGNREGA wages have still not been paid in April 2018.

“99% of the Fund Transfer Orders (FTOs) for MGNREGA wage payments sent to the Public Finance Management (PFMS) in April 2018 remain unprocessed. The bulk of FTOs of the last two months are also yet to be processed – 86% of the FTOs of March and 64% of the FTOs of February.

The letter also highlights how the introduction of the National Electronic Fund Management System (NEFMS) to aid in quicker disbursal of wages has only allowed the Finance Ministry to “tighten” its leash over MGNREGA funds. “Now it routinely withholds the processing of FTOs,” it reads.

This comes just days after the Morcha wrote to Rural Development Minister Narendra Singh Tomar saying that the Centre has not yet revised the wage rates for the 2018-’19 financial year, demanding that this be rectified immediately.

The group also asked the government to fix the MGNREGA wage rate at a minimum of Rs 600, as the Seventh Pay Commission had recommended a minimum monthly salary of Rs 18,000.

Read the full text here:

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“Stagnant wage rates are not the only rude shock that workers of the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) received this month. Most of the them also remain unpaid for the work done by them in the past few months. Ninety-nine per cent of the Fund Transfer Orders (FTOs) for MGNREGA wage payments sent to the Public Finance Management (PFMS) in April 2018 remain unprocessed. The bulk of FTOs of the last two months are also yet to be processed–86 per cent of the FTOs of March and 64 per cent of the FTOs of February (see the Annexure).

In January 2016, the central government introduced the National Electronic Fund Management System (NEFMS), allegedly to streamline the process of MGNREGA wage payments. However, this system has only tightened the Ministry’s leash over MGNREGA funds. Now it routinely withholds the processing of FTOs. Also, in NEFMS states are no longer able to make payments to workers from their revolving funds to tide over delays in release of funds by the Ministry.

Last year, the Ministry froze processing of FTOs worth over Rs 3,000 crore due to lack of MGNREGA funds. It may be recalled that in August 2017, the Ministry of Rural Development demanded a supplementary MGNREGA budget of Rs 17,000 crore, but the Ministry of Finance approved only Rs 7,000, that too in January 2018. As inadequate funds should not be a problem at the beginning of a financial year, the reason for the current non-processing of FTOs is not clear.

The situation of long and unpredictable delays in MGNREGA wage payments continues despite the ongoing public interest litigation filed by Swaraj Abhiyan in which the Supreme Court has instructed the government to ensure that workers are paid within 15 days of doing work. Moreover, workers are not compensated for the wage delays that take place after the generation of FTOs.

In a damming document, the Ministry of Finance accepts the partial payment of compensation. It goes on to state that payment of compensation for the entire duration of delay will be a heavy financial burden on the government. This exposes the deliberate underfunding of the employment guarantee programme. As the Modi government failed to curtail MGNREGA through overt measures such as restricting the programme to the poorest districts or reducing the wage – material ratio, it has resorted to undermining the Act by starving it of funds.”