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LATEST NEWS UPDATES | Stricter norms to decide centre's NREGA allocation to states by Devika Banerji

Stricter norms to decide centre's NREGA allocation to states by Devika Banerji

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published Published on Mar 24, 2011   modified Modified on Mar 24, 2011
State governments will have to abide by stricter rules to receive money from the centre for the rural employment scheme in the next financial year 2011-12.

The centrally sponsored Mahatma Gandhi National Rural Employment Guarantee Scheme ( MGNREGA )) has been one of the biggest drivers of rural consumption in the country.

Stricter measures of fund release might lead to lower transfer to states at a time when high interest rates are already threatening to slowdown consumption.

Under the new rules, states will not receive funds at the beginning of the year, as has been the case earlier, till they provide utilisation certificates for the unspent balance, the Ministry of Rural Development has said.

"Last year we had to make an exception as states were unable to match standards set by us for the release of funds and we relaxed the rules," said an official in the rural development ministry. In the next fiscal even the initial release will be made on quality of state utilisation and proposals, the official said.

The centre has also mandated an audit for the scheme for each district by setting a directorate of audit in each state.

The central government releases funds to states for the scheme in two tranches based on estimates of work demand and physical outcome proposals set out by states in their respective labour budgets. The first tranche is made without conditions, but this year even the first tranche will be released with riders to the states.

The centre also plans to undertake independent appraisals to assess the quality and integrity of field processes and data reported by states before releasing funds to states.

"We did that to instill accountability on the state governments however we did not adhere to the conditions placed as most states were unable to meet the targets and standards set," the official added.

According to the new rules, states will have to adhere to estimates made in their labour budgets and it will be compulsory for them to submit monthly progress report. Besides they will also be required to increase staffing for administration purposes and set up vigilance departments to provide 100% monitoring in the block level, 10% in the district level and 2% monitoring in the state level.

Certificates regarding social audit of works conducted, timely and number of complaint disposal, number of accounts opened in the post offices will also be required to be submitted along with routine utilisation certificates.

Moreover, the centre will take into consideration the track record of states with respect to man days, works completed, work demand before approving projections made by states in the labour budget.

The government has provided Rs 40,000 crore for the scheme for 2011-12.

The Economic Times, 24 March, 2011, http://economictimes.indiatimes.com/news/economy/policy/stricter-norms-to-decide-centres-nrega-allocation-to-states/articleshow/7777777.cms


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