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LATEST NEWS UPDATES | MGNREGA: Honest labour's love lost as government makes payment process complex -Sakina Dhorajiwala

MGNREGA: Honest labour's love lost as government makes payment process complex -Sakina Dhorajiwala

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published Published on May 3, 2018   modified Modified on May 3, 2018
-The Economic Times

In over a decade, the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) has been instrumental in providing employment to rural households. One of its key provisions is that once the work week is completed, the worker must be paid within 15 days. Millions depend on the timely payment of these wages.

The payments process has made many strides in the last decade, from cash payments to wages being deposited directly in bank accounts. However, the payments process has become increasingly complex, lacking in transparency and has no clear accountability norms. The technology that was meant to help the workers is now discouraging them from working in MGNREGA.

When a work week is completed, a fund transfer order (FTO), a digital cheque or pay order, is generated. This is approved at the local level, and goes through the ministry of rural development (MoRD) to the Public Fund Management System (PFMS), where the payment is processed.

If the payment is Aadhaar-based, there is an additional step where the states’ sponsor bank processes these payments through the National Payments Corporation of India (NPCI), debits the state account and credits the beneficiary account. The final payment status is reflected in the public domain through the Management Information System (MIS). Once processed, a payment can either be credited or rejected through the automated system.

The annual master circular states that all transfers are real-time and that it takes one day for the transfers to take place after the FTO is signed. But this is far from the truth, especially when the payment fails or is ‘rejected’.

Rejected payments are those transactions for wage payments that fail due to technical reasons. There is absolutely no clarity at which point of the payment cycle (after FTO generation) the payment has failed, or where it is stuck. The worst affected are the MGNREGA labourers. On some occasions, even if they know that their payment is rejected, they do not have clarity on what the redressal mechanism is.

As per the NREGA MIS, in 2016-17, Rs 622.3 crore worth of transactions were rejected. Of which, Rs 194.5 crore is still pending regeneration and Rs 85.4 crore worth is pending a response from the bank. The process that was supposed to take ‘one day’ has been delayed for over two years and wages remain unpaid.

In 2017-18, of the Rs 476.5-crore worth rejected transactions, Rs 197.5 crore is pending regeneration and Rs 112 crore is pending a response from the bank.

Rejected payments are in the blind spot of GoI’s priorities since there are no clear accountability norms set by the Centre. Payments fail due to several technical reasons. For instance, if the account in which you are to receive your wages has not been used for any transaction for a certain period of time, it may be ‘frozen/blocked’. Other cited reasons include ‘no such account’ and ‘inactive Aadhaar’.

Once the reason is identified, it is the prerogative of the block administration to inform the worker and take corrective action along with the bank. Once corrected, the block administration ought to regenerate the FTO. But if the FTO is regenerated without correcting the mistake or resolving the issue, it will be rejected again.

To rectify most of the errors, the beneficiary will need to fulfil the requirements at the bank, or with the customer service points, and finally, the block must regenerate the FTO. With the advent of Aadhaar, people have encountered all sorts of issues. They are confused about which bank account the Aadhaar number has been linked to.

Please click here to read more.

The Economic Times, 25 April, 2018, https://blogs.economictimes.indiatimes.com/et-commentary/mgnrega-honest-labours-love-lost-as-government-makes-payment-process-complex/


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