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LATEST NEWS UPDATES | Bank accounts must for MGNREGA beneficiaries

Bank accounts must for MGNREGA beneficiaries

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published Published on Aug 5, 2011   modified Modified on Aug 5, 2011

-The Economic Times

 

The government has amended its landmark Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) to ensure that beneficiaries receive wage entitlements under the Act within 15 days through institutionalised channels, like banks and post offices.

The amendment to Schedule II of the MGNREGA now makes it mandatory under the law for state governments to ensure that every beneficiary has a bank or post office account and the disbursements are made exclusively through these channels. Moreover, the payment has to be made within 15 days from the last day of employment.

The move is expected to ensure timely payment of wages as well as to tackle the increase in number of cases of corruption in the scheme.

"This is one step forward in a series of initiatives to ensure that hassle-free wage payments to job seekers are made," said Jairam Ramesh, Minister for Rural Development in a statement to the press.

The government has also urged the state governments to introduce the bank correspondent (BC) model to make up for the absence of banks and post offices in rural areas. Under this model, banks shall appoint Business Correspondents who will deliver the banking services to doorsteps of intended beneficiaries at the village-level. This way the beneficiaries would not have to rely on middle men for services.

The state governments will make a payment of 80 per account per year to banks to implement the BC model on ground. The cost of establishing the model will be met through existing resources. States have been advised to meet the costs of implementing the model from 6% of their overall allocations - that is reserved for administrative expenses.

The Economic Times, 5 August, 2011, http://economictimes.indiatimes.com/news/news-by-industry/jobs/bank-accounts-must-for-mgnrega-beneficiaries/articleshow/9487625.cms


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