Modi govt owes states ₹5,812 crore in MGNREGS wages

The Central government owes a cumulative ₹5,812 crore as MGNREGS (Mahatma Gandhi National Rural Employment Guarantee Scheme) wages to all the states as of November 25, 2019. This comes to light in the backdrop of consumer spending having fallen for the first time in more than four decades in 2017-18. Additionally, there has been a steady increase in MGNREGS workers since 2015-16, mostly due to a fall in farm incomes. This year, the Modi government had allocated ₹60,000 crore for the rural employment scheme.

According to the data posted on the official website of the Ministry of Rural Development, it owes the most amount to non-BJP ruled states including Andhra Pradesh, West Bengal, Rajasthan and Madhya Pradesh. The Central government owes ₹767 crore to Andhra Pradesh, followed by ₹683 crore to West Bengal, ₹633 crore to Rajasthan, ₹378 crore to Bihar, ₹329 crore to Madhya Pradesh, ₹203 crore to Kerala and ₹125 crore to Jammu and Kashmir.

Among the BJP-ruled states, the Central government owes the highest to Karnataka ( ₹603 crore), followed by Manipur ( ₹371 crore), Assam ( ₹205 crore) and Jharkhand ( ₹170 crore). It owes the least to Goa ( ₹44 lakh).

An analysis of the various data sets put out by the ministry shows that there are differences within the data too. Under the ‘at a glance’ section, the government has indicated that it has released ₹53,570 crore, which cannot be the case as it has also stated that the figure of the total available funds right now stands at ₹56,271 crore. It is pertinent to remember that the total MGNREGS funds for this year is ₹60,000 crore.

The payment system is centralised and as a result the state governments cannot pay the workers even if they wanted to.

The Act states that the worker should receive wages within 15 days of completion of the workweek, failing which a delay compensation is to be paid per day of delay. However, the government rarely acknowledges the delay; instead most often the government misrepresents the delay.

According to a study done by Rajendran Narayanan, Sakina Dhorajiwala and Rajesh Golan on the delay in MGNREGS wages for FY 16-17, the government had indicated that the principal reasons for such delays were “infrastructural bottlenecks, (the lack of) availability of funds and lack of administrative compliance”.

They had analysed over 90 lakh transactions for the financial year 2016–2017 across 10 states. They had observed that only 21% of the payments were made on time and the central government alone was taking an average of over 50 days to electronically transfer wages. On aggregate, the true total delay compensation payable is about ₹36 crores.

The report states that the government intends to pin all responsibility to the states and payment agencies. The government’s skewed outlook of ‘delays’ meant that workers would not be compensated for the full extent of the days and also absolved the Central government of any responsibility.

This backlog of payment of MGNREGS comes at a time when a leaked consumer expenditure survey by the National Statistical Office (NSO) indicates that there has been a decline of 8.8% on the average monthly spending in rural areas in 2017-18 compared to 2011-12. This report, which first appeared in Business Standard, states that this is the first time in four decades that consumer spending has declined in real terms.

But it does seem like the government of the day is not concerned. “It is really criminal that the government is troubling the poorest of the poor. First of all, MGNREGS wages are half of the market wages; then these wages are not growing. Now, this delay in payment of wages will only push more people into poverty as this means a reduction in demand. This will add more stress on them,” underscored Himanshu, who works with the Centre for Economic Studies and Planning at Jawaharlal Nehru University.

Slamming the government for its inaction, Himanshu contended that ‘this government doesn’t care for the poor’. “It is not just MGNREGS wages. All the sectors affecting the rural economy are in a crisis. And the government is doing enough. They need to put more money in the hands of the poor and MGNREGS is one way to do it. They should increase MGNREGS wages and also increase the number of working days. They must ensure immediate payment as then those who have worked will have the money to spend also,” he says.

In October this year, data from the labour bureau showed that that wages for rural male general agriculture workers decelerated by 3.4% in July. Additionally, the consumer price inflation for agriculture workers during the same month was 6.21% against 2.04% a year ago.

Demonetisation and the hasty implementation of goods and services tax (GST) has aggravated the rural slowdown.

A questionnaire sent to the Rural Development Minister and several secretaries at the ministry 72 hours ago remains unacknowledged and unanswered. This story will be updated as and when a reply is received.