Delayed NREGA payment: How Centre failed to pay 57% of compensation amount  

A new study led by a senior expert of the Azim Premji University, Rajendran Narayanan, has said that in whopping 57% of cases, the Government of India has not been calculating compensation it should be paying for the delay in the payment of wages, as required under the National Rural Employment Guarantee Act (NREGA), 2005.

The study has been released as part of a media kit released by Swaraj Abhiyan to “expose” the Centre’s claims of prompt electronic transfer of funds through the National Electronic Fund Management System (N-eFMS) under NREGA, which mandates to pay wages within 15 days of workers completing their allocated work, after which a payment of 0.5% of wage compensation per day has to be paid.
Based on a survey of 3,446 gram panchayats of Jharkhand, Bihar, Chhattisgarh, Karnataka, Uttar Pradesh, Rajasthan, Madhya Pradesh, Odisha, West Bengal and Kerala, the study is titled “Analysis of Payment Delays and Delay Compensation in NREGA: Intermediate Findings of an Ongoing Study Across Ten States for Financial Year 2016-17”.

The study says, it found during the study period that the total compensation payable for all the districts should come to ₹36 crore, but only about ₹15.6 crore was calculated, while ₹20.4 crore was “not even getting accounted”.

For the country as a whole, the study estimates, in the financial year 2016-17, if only 42.21% of the payment was generated within 15 days, the “delayed payment” in compensation for the entire country was ₹519 crore. However, it insists, based on an analysis of sampled panchayats, the reported compensation not calculated came to an additional ₹689 crore.

Pointing towards how the delayed payment takes place, the study says, the so-called electronics transfer depends exclusively on how quickly the funds transfer order (FTO) is prepared. FTO itself requires two digital signatures – by panchayat and block level officials.

Once FTOs are ready, “the funds are released by the Centre's Accredited Bank to the state's account (sponsor bank)”, the study says, adding, “This is, in turn, transferred from the sponsor bank to individual beneficiaries' accounts.” It insists, “After the second signature on the FTO, the onus of the delays in the process is on the Central government.”

Giving the example of how the delay happens, the study says, a week’s wage for a worker in 2016 was ₹1,002. Since this worker’s muster was closed on July 5, 2016, the official deadline before compensation starts getting calculated was July 20, 2016. In this case, the second signature on the FTO was made on September 24, 2016, i.e. 67 days after the official deadline. Based on this, at 0.5% per day delay, he would get ₹34.

However, interestingly, this worker received the compensation in his bank account (credited date) on November 3, 2016. This amounted to an additional delay of 40 days, making the total delay in the payment of wages to 67 + 40 = 107 days. Yet, the “government does not even calculate the delay compensation for the additional 40 days' delay”, which came to ₹20.

Calling it “a complete mockery”, Swaraj Abhiyan quotes the Chhattisgarh government as saying in an affidavit to the Supreme Court, “Due to unavailability of funds, and non-receipt thereof on time from the Union government, there was delay in making timely wage payments.” The Haryana government also stated, the delay in as “occurred mainly due to the delay in release of funds by the Ministry ranging 3 to 4 months.”

Not ruling out more delays, quoting official sources, Swaraj Abhiyan states, as of today, only 20% of the funds budgeted for 2017-18 are left for paying NREGA wages. “Thus in four months, 80% of the programme funds have been utilised”, it states, regretting, calculations for funds “don’t take into consideration states’ projections.