The Mahatma Gandhi National Rural Employment Guarantee ct (MGNREGA) was a pivotal shock absorber during the first wave of the pandemic. Its functioning hinges on sufficient budget allocation, reliable payment systems, and ease of access to wages. However, the Government of India (GoI) not only reduced the MGNREGA budget this year but also neglected it in subsequent relief measures post the second wave. The MGNREGA, among other social security programmes, can be a powerful safety net for the poor. But delays in payments continue even in such precarious times.
Until recently, every MGNREGA FTO consisted of multiple transactions of workers across caste categories. On March 2, the GoI issued a circular to change the payment system so that payments can be made separately based on the caste of workers (SC, ST and “Others”).
To understand the efficacy of this circular, we obtained all wage transactions from April 1, 2021, to May 23, from 26 randomly sampled blocks of Jharkhand. The objective was to assess the difference in Stage 2 of the payment process across caste categories. We calculated Stage 2 delays for these transactions and combined them with the caste category of the workers. Out of 3,14,710 transactions for which the FTO was sent to the GoI, 54.3 per cent of transactions remained unpaid as of May 23. The caste category of workers was missing for 7,097 transactions. We were, therefore, able to calculate caste-wise Stage 2 delays for 1.43 lakh transactions.
The GoI took 26 days on average to process the transactions in the second stage. We do not find any evident difference in the time taken to complete this stage of the payment process across SC, ST, and “Others” categories. In a previously conducted study of 90 lakh transactions across 10 states, we found that Stage 2 alone was taking more than 50 days. These delays were completely unaccounted for as they were not reflected in the MGNREGA MIS. Based on these findings, in 2018, the Supreme Court gave strong orders reprimanding the GoI for not paying compensation for the delay it was causing. Three years hence, the GoI continues to violate the Act and court orders. What is more surprising is that such inordinate delays are being observed at the beginning of the financial year, when the programme is meant to be flush with funds.
The digital payments system of MGNREGA has been a laboratory of many experiments since 2012. However, no mechanism to solicit feedback from workers to evaluate the robustness of these systems has ever been created. In this case, there was no consultation with the state governments either. It is no surprise then that Stage 2 of the payment process is taking three times more than it should. India boasted 4,355 crore digital retail transactions in 2020-21 as per RBI data. These are usually completed within a day if not in a few minutes. In comparison, MGNREGA transactions, which are only 1.6 per cent in the volume of these, get routinely delayed. Why should the timely payment of subsistence wages in MGNREGA continue to be so elusive?
This column first appeared in the print edition on July 24, 2021 under the title ‘Holes in the safety net’. Dhorajiwala and Malla are researchers with LibTech India. Rajendran teaches at Azim Premji University.
