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Jairam turns to CAG for help on NREGA by Sreelatha Menon

In a move most ministries would shy away from, Rural Development Minister Jairam Ramesh has written to the Comptroller and Auditor General (CAG) of India, requesting him for a performance and financial audit of the National Rural Employment Guarantee scheme (NREGA), the most heavily funded flagship scheme of the UPA government.

The minister has written to CAG Vinod Rai, who was recently criticised by Prime Minister Manmohan Singh for calling frequent press conferences on policy issues.

Addressed to “My dear Vinod”, the letter is a plea for help from the minister, who says the Rs 40,000-crore scheme needs CAG policing on a priority basis in the top spending 12 states. “It needs focus and attention and has to be accorded a high priority,” he writes in the letter dated November 15.

While Uttar Pradesh leads this list, it is followed by Ramesh’s home state, Andhra Pradesh. The plea follows his war of words with Uttar Pradesh Chief Minister Mayawati, who had rejected his demand for a CBI inquiry into alleged corruption in the scheme in UP. He had made the request in a letter dated October 24 and then again on November 14. Claiming that NREGA was in good health in UP, Mayawati had accused Ramesh of indulging in politics in light of the coming Assembly elections.

In his letter to the CAG, Ramesh has listed multiple channels through which money has been lost between the Centre and the NREGA beneficiaries.

Giving the example of Andhra Pradesh, he said an additional Rs 500 crore had been billed to the Centre, citing man days given to the workers even after they had completed the 100 days mandated by the Act.

Under NREGA, a worker is entitled to only 100 days of paid work each year. However, the state has allowed people to work for more days and then billed the cost on the Centre. “This could also be true of other states,” Ramesh writes.

“There are some serious concerns about the manner in which NREGA funds are being utilised,” he writes and goes on to give a list of instances of deviation.

On top of the list is the above mentioned Andhra Pradesh model of deviation which has been burning a hole in the Centre’s pockets.

Second is a breach of the ratio of money spent on materials and wages, which, according to the law, is 40:60. The minister does not quote examples, but the violation is widely known to be prevalent.

Last year, a district in Rajasthan had cited a railway overbridge built under NREGA as a case befitting a reward under the scheme, activists say. There has been a blatant breach, with money being given to contractors to do pucca work under the scheme, which is strictly meant to provide wage employment to the needy.

The third deviation is regarding the quantum of work prescribed to calculate wage rates. The work assigned for payment of one man day’s wages under NREGA is much less than that prescribed under state schemes. “This amounts to higher financial outflow from the Central exchequer compared to what it would have been if similar quantum of work would have been done under any of the state’s schemes.”

The other method of diversion is most rampant in the north east, Ramesh writes. States pay people on a time-rate basis, or minimum wages paid for working for eight hours, rather than for completing a certain amount of work per day, as is done in most states. The measurement of work has been a major cause for delay in payments and activist Jean Dreze has been pushing the time rate-model for the whole country. Citing the model practiced in Sikkim, he had said at a NREGA conference called by the minister recently: “It helps promote transparency and cuts delays. If more money is spent, it is only going to the beneficiaries.”

However, the minister says it should be stopped, calling it illegal and a financial strain on the Centre.

The last form of deviation comprises misuse of administrative overhead funds available under the scheme. About Rs 2500, or six per cent, of the budget is available for administrative expenses. Says the minister: “This is a huge amount and is open to misuse.”