The Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) has been in a crisis for a few years now. Rural workers are finding it increasingly hard to get work and payment on time. Most of them are also denied their other entitlements under the act such as worksite facilities, unemployment allowance (when work is not given on time), and compensation in case wages are paid with delays.
This article discusses the nature and scale of the MGNREGA crisis in the country and goes on to examine the reasons for the crisis in Jharkhand, in the hope that this will help shed light on the situation in other parts of the country. Lastly, it discusses some of the promising initiatives that have been taken recently to improve MGNREGA in Jharkhand.
This article draws on official data from the MGNREGA website, existing literature on the programme in Jharkhand, discussions with activists working in the state, and several years of work on MGNREGA in Jharkhand in association with local help centres for rural workers, civil society organisations and the state government.
Nature and Scale of the Crisis
Employment Crash: Over the past five years, there has been a major crash in the scale of MGNREGA employment. In 2014–15, 155 crore person-days of MGNREGA work were generated across the country, just about half the quantum of employment generated in 2009–10. In Andhra Pradesh and Chhattisgarh, employment has fallen by more than half in the last two years alone. The reduction in Bihar’s employment has been as large as 60% between 2014–15 and 2012–13. Even in absolute terms, the scale of employment generated in 2014–15 was very small in some states, for example, all rural households in Uttar Pradesh and Maharashtra, on an average got work for only about five days in the entire financial year (Table 1, p 39).
Budget Caps: The central government funds the wages to be paid to unskilled MGNREGA workers and 75% of the material costs; the rest is paid by the state government. Every year, a certain allocation is made for MGNREGA in the union budget, but if required the central government gives funds over and above this allocation, as the programme is meant to be demand-driven.
However, in 2014–15 the central government treated the initial allocation of ₹34,000 crore as a cap on MGNREGA expenditure. As a result, when funds dried up towards the end of that financial year, workers were denied work without any compensation in the form of unemployment allowance. Apart from the budget caps, delays in transfer of funds from the Ministry of Rural Development also hampered the ability of states to provide timely work to all workers demanding employment. In 2015–16, the budget caps were removed, but delays and uncertainties in the flow of funds continued to affect MGNREGA.
Delays in Wage Payments: As per official data, 70% of MGNREGA wages were paid with delays (more than 15 days after the completion of a week’s work) in 2014–15; 64% of the delayed payments were made more than a month late. In Punjab and West Bengal, the proportion of delayed payments was higher than 90%.1
Shrinking Rights: Since MGNREGA was enacted 10 years ago, several entitlements of workers have been curtailed. To illustrate:
(i) MGNREGA is no longer linked to the Minimum Wages Act. The MGNREGA wage is now fixed at the discretion of the central government (Drèze 2015). As a result, in several states, MGNREGA wage is lower than the state’s minimum agricultural wage. In Punjab, for example, the MGNREGA wage in 2014–15 was `66 below the state’s minimum agricultural wage.
(ii) At the time of enactment, MGNREGA entitled workers to claim compensation of up to ₹3,000 in case of delays in wage payments, as per the Payment of Wages Act. But the revised schedules of the act now entitle workers to a compensation amount of only 0.05% of the pending wages per day of delay.
(iii) The initial MGNREGA guidelines required the implementation of the programme act to be consistent with the Persons with Disabilities Act, which mandates spending 3% of the funds for the benefit of persons with disabilities. This requirement was subsequently done away with.
Violations of Entitlements: Workers are not only facing dilutions, but their MGNREGA entitlements are also violated. Most workers who are denied work are also unable to secure the unemployment allowance.2 Instances of payment of the severely reduced compensation amount in case of wage delays are also few and far between. Worksite facilities (drinking water, first-aid kit, shade for rest, crèche for children below six years of age and notice board) have become a rare sight and grievance redressal remains a distant dream.
The Case of Jharkhand
The crisis in the employment guarantee programme has affected Jharkhand as well, a state which has amongst the highest levels of poverty in the country and tremendous potential for MGNREGA works. Between 2012–13 and 2014–15, there has been a 20% fall in MGNREGA employment in Jharkhand. The unavailability of adequate work and delays in wage payments have caused immense economic hardships in rural areas. Many workers have been forced to migrate to other parts of the country, some have had to go as far as Kerala (Aggarwal 2015).
Disruptions in Funds: Like the rest of the country, Jharkhand suffered from the budget caps imposed by the central government in 2014–15. The same year, the state also faced long delays in receiving funds from the Ministry of Rural Development. However, the blame for this situation lay partly with the state, as it did not complete the process of collecting MGNREGA audit reports from all the districts and forwarding them to the centre on time; a prerequisite for the release of funds from the ministry.
Due to the budget caps and delays in receiving funds from the ministry in 2014–15, Jharkhand was left with very little money from October 2014 to the rest of the financial year to provide employment and ensure timely payment of wages. Given the uncertainty about receiving additional funds in the rest of the financial year, local officials became reluctant to open works; they preferred violating workers’ right to work than dealing with the hassles of delays in wage payments. Further, the ministry exempted the states from paying compensation to workers who did not receive their wages on time due to shortage of funds.
Lack of Accountability: Even when funds are available, workers are often unable to get work because of delays in sanctioning schemes, starting schemes or allotting work to workers. Such situations arise because of a general lack of accountability of local officials and MGNREGA functionaries, creating an atmosphere of impunity, which results in rampant violations of workers’ entitlements.
Failure of the state government to impose penalties on the erring officials and functionaries has also contributed to large-scale delays in wage payments. Timely payment of wages requires several operations to take place on time—generation of muster roll, filling of the muster roll, entry of the filled muster roll, measurement of work, generation of wage list, generation of Fund Transfer Order (FTO) and signing of the FTO. As all these operations take place sequentially, delay at any step stalls all the subsequent steps as well. In order to avoid these delays, the central and state governments have repeatedly prescribed clear timelines within which these operations are to be completed and have also identified the functionaries responsible for them. However, most officials and functionaries are either unaware of these timelines or flout them knowingly as the errant persons are almost never held accountable.
In April 2015, the Government of Jharkhand finally notified rules for payment of compensation in case of delayed payments, and in November 2015 it notified rules for payment of unemployment allowance in case of delays in giving work to workers. However, these rules are yet to be activated.
Shortage of Staff: MGNREGA functionaries, that is, gram rozgar sevaks, block programme officers, computer assistants, engineers and accountants form the backbone of the programme’s implementation in rural areas. Despite the crucial role of these functionaries in ensuring timely work and wages to workers, 25% of the posts were vacant in December 2015.3
The staff shortage increases the work load on the existing functionaries without any additional pay and causes delays in the implementation of the programme. Even the pool of functionaries that does exist is fairly unmotivated, given the paltry salaries for most of them, lack of financial incentives to improve performance and virtually no public appreciation for those who do their work well.4 In the absence of regular trainings for the functionaries, they are usually left on their own to grapple with the periodic changes that are introduced in the implementation of the programme.
Continued Corruption: Despite the introduction of many transparency and accountability provisions, corruption continues to affect MGNREGA in Jharkhand. The Public Evaluation of Entitlement Programmes (PEEP) survey conducted in May–June 2013 compared the gap between the self-reported number of MGNREGA work (in 2012–13) among sample households with the official records for the same households. On an average, the scale of work as per the official records was just 7% higher than what was reported by the household. But in the case of Jharkhand, the official figures were more than twice as high, suggesting widespread siphoning off of funds for labour payments through inflated muster rolls.
Siphoning off usually takes place through collusion of several persons, typically involving middlemen, MGNREGA functionaries, elected representatives, local officials and postmasters (in case of wage payments through post offices). For example, in July 2014 a case of corruption was unearthed in a road construction work in Murhu block of Khunti District, in which muster rolls were extensively fudged by adding fake names and inflating entries for the workers who had actually worked. Based on these fudged muster rolls, wages were credited into workers’ post office accounts and then withdrawn by the local middlemen and mate in connivance with the postmaster. Meanwhile, the workers received only token amounts in cash. The gram rozgar sevak participated in the scam by signing the fudged muster rolls and the juniour engineer manufactured an inflated measurement book. Block-level officials and elected representatives may also be responsible, as the work was implemented by the panchayat samiti.
Another example of corruption was uncovered a year later in Palamu District, in which large-scale fake demand for work was made by MGNREGA functionaries on behalf of workers and the work was carried out by machines, which are banned in the programme. As wages were paid after fingerprint authentication of workers in whose names the payments were made, they too were made party to the scam being paid token amounts for coming to the bank branch and verifying their identity.
Corruption is also rampant in procurement of material for MGNREGA works. Material is to be procured only from registered vendors, but it is usually supplied by unregistered suppliers. These unregistered suppliers pay a commission to the registered vendors for providing them with a bill from their establishment which is then submitted to the administration for reimbursement. As a part of the material payment is used for paying commission to the registered vendor, the material which is actually supplied is less than the amount for which the bill is made. The resultant shortage of materials either leads to the asset remaining incomplete or getting constructed poorly. In case of individual works, often the beneficiary puts money from her own pocket to provide the additional material that is required to complete the asset. Sometimes the work estimates are prepared with inflated allocations for materials, to ensure completion of assets even after factoring in the commissions paid from the allocation for material procurement.
Flaws of Financial Institutions: In 2007, the system of MGNREGA wage payments shifted from cash to post offices and banks. However, this change has not been accompanied by an adequate expansion and strengthening of these financial institutions. As a result, workers have been facing hassles such as long distances to the nearest bank branch, foot-dragging by bank employees in opening their accounts, siphoning off wages from post office accounts, etc.
Given the extensive network of post offices than bank branches in Jharkhand’s rural areas, 70% of MGNREGA workers’ accounts are still in post offices. However, due to the weak norms of accountability exercised by the postal department, it is not difficult for middlemen, mates and others to siphon off wages from workers’ post office accounts by colluding with the local post master. Also, delays in wage payments through post offices are substantial, as FTOs for post office payments have to be processed at several stages before the amount is credited in the worker’s account. Non-computerisation of the lowest level of post offices (branch post office) adds to the delays, as money and pay orders have to be transferred manually from the next higher level (sub-post office). As branch post offices are not allowed to keep large sums of money due to concerns of theft, they are often unable to pay workers because of unavailability of cash.
Delays in processing wage payments and risks of siphoning off are lower in the banking system. But banks have their own problems. Despite the central government’s much touted Pradhan Mantri Jan Dhan Yojana for financial inclusion, opening bank accounts in rural Jharkhand is still a harrowing experience for MGNREGA workers. Due to the limited number of bank branches in rural areas, workers often have to make long trips at their own expense to access the banks. The bank branches are usually crowded and suffer from shortages of bank staff and MGNREGA workers often have to wait for a long time to withdraw their wages. Work comes to a virtual standstill in the absence of electricity or internet at the bank branches, forcing workers to make another trip to open their account or withdraw their wages.
Often, bank branches simply refuse to open workers’ accounts or delegate this task to the common service points or pragya kendras set up in some block headquarters and gram panchayats to provide financial and other services to the rural population. For example, after waiting for about three months for the local Bank of India branch to open their bank accounts, about 600 workers of Satgawan block of Koderma complained to the deputy commissioner in March 2015 about their inability to work in MGNREGA for want of a bank account. It was only after receiving a threat of disciplinary action from the district official that the bank opened accounts of these workers.
To reduce the hassles of long distance and queuing to withdraw wages from bank branches in rural areas, many banks employ “business correspondents” to bring banking services to people’s doorstep. Users of the services provided by business correspondents authenticate their identity through biometrics or smart cards.
In Jharkhand, however, the experience of payments through business correspondents has been riddled with difficulties. Internet signal required for biometric authentication is often not available in rural areas away from the block headquarters. A sizeable proportion of workers are unable to verify their identity using biometrics either because of weathered fingerprints or due to improper capturing of their fingerprints at the time of enrolment in the biometric system. Such workers have to go to the local bank branch to withdraw their wages. To reduce their work load, many bank branches entertain only those with a written confirmation from the business correspondent about their inability to withdraw wages using biometrics. This eliminates the option of directly withdrawing wages from the bank branch in case the business correspondent is dishonest or does not visit the village frequently enough.5
Weak Grievance Redressal: Jharkhand’s grievance redress system for MGNREGA is extremely weak. Most workers are unaware of their right to complain. Those who do manage to take their grievance to a government official or functionary are often turned away. The small proportion of complaints that do get registered are seldom acted upon and the wrongdoers are rarely penalised.
As per the records of the rural development department, the state-level helpline received only 425 complaints from May 2010 to June 2015. Perusal of the last 50 complaints received during this period revealed that no systematic follow-up was done to ensure action on the reported grievances. Despite repeated instructions from the state on setting up district-level helplines, only 11 districts had complied till July 2015.
As per MGNREGA rules, up to two ombudspersons can be appointed for every district. But in July 2015, only five ombudspersons were working in the entire state, each in charge of two–three districts. Even among these few ombudspersons, only about half were active. The state has been unable to appoint more ombudspersons or renew the term of some of the existing ombudspersons as the central government is yet to nominate its representatives for the selection committee.
Most of the routine social audits which take place in the state are cosmetic exercises, as they are conducted by the same functionaries and officials who are responsible for implementing the programme, with little participation of the gram sabha.
Overdependence on Technology: Over the past few years, there has been a steady increase in the use of technology in MGNREGA. Some well-designed technological innovations, such as the Management Information System (MIS), have greatly helped in increasing accountability and transparency in the implementation of the programme. However, several parts of Jharkhand are suffering because of blanket introduction of technology without adequate preparation.
The system of electronic payment of MGNREGA wages was introduced in Jharkhand a few years ago. This system requires all payment-related processes—generation of muster rolls, wage lists and pay orders—to take place online at the block or gram panchayat offices. However, as many of these offices have severe deficits of computer equipment, electricity supply and internet connectivity, delays in these processes are rampant.
The electronic payment system also requires workers’ bank/post office account numbers to be recorded correctly in the MIS. Mistake of even one digit precludes payment. If the mistake in recording a worker’s account number is identified before she is allotted work, it has to be rectified by the local administration at the district level. However, if the mistake is not corrected in time, the FTO transaction for the worker’s wage payment gets rejected. At the time of scrutiny of the rejected FTOs, the incorrect bank/post office account numbers are rectified by a block-level functionary and new FTOs are generated for wage payment. If the revised bank account number is also incorrect, the block administration loses the authority to rectify the mistake a second time and has to request the state MIS officer to enter the correct bank/post office account number. These correction measures often take months as they are rarely a priority on the MGNREGA functionaries’ task lists.
Linkage with Aadhaar: MGNREGA workers in Jharkhand are being zealously linked with Aadhaar, for the stated purposes of weeding out “ghost” workers and enabling biometric-based payments to ensure that wages go in the right hands. Although there is merit in pursuing both these objectives, the manner in which Aadhaar is being linked with MGNREGA grievously violates workers’ entitlements.
Despite Supreme Court orders prohibiting government authorities from denying public services to people for want of Aadhaar, workers without a UID (Unique Identification) number are routinely denied work. One reason for this is that allotting work to workers without Aadhaar has been made a complex process in the MGNREGA MIS since April 2015.6 The other reason is intense pressure from the ministry to increase the rates of Aadhaar linkage of MGNREGA workers. This demand has forced MGNREGA functionaries to spend a significant part of their working hours collecting workers’ Aadhaar numbers and entering them in the MIS. To meet the targets of Aadhaar linkage, many functionaries have even cancelled the job cards of workers without Aadhaar.
Efforts towards Improvement
Although the functioning of MGNREGA in Jharkhand leaves much to be desired, there has been significant progress since 2006, when a survey of Manika block of Latehar and Manatu block of Palamau revealed that implementation of the act was mainly restricted to distribution of job cards. Workers as well as government officials had poor understanding of the act. Absence of gram panchayats were also a major hurdle in the implementation of the act. The lucky few who got some employment were paid with long delays and received less than the statutory minimum wage (Bhatia and Drèze 2006).
Today, Manika is a very different place, (Manatu less so). Most rural households in need of MGNREGA work have a job card and a large number of workers are able to get employment in their gram panchayat. Most people are aware of the basic provisions of the act and have learnt to demand work, instead of waiting for schemes to open. These changes have been brought about to a large extent by the efforts of the MGNREGA Sahayata Kendra, operational in the block premises since 2010. The sahayata kendra is operated by local volunteers who help workers organise and access their entitlements. The kendra helps workers in tasks such as applying for a job card, demanding work, opening a bank account, tracking the payment of their wages and filing complaints. It has also been fighting corruption in the programme by conducting social audits, public hearings and joint enquiries with the administration.
Several noteworthy initiatives in improving MGNREGA have been taken by the joint effort of the Jharkhand government and the state’s civil society. The first in a series of such initiatives taken recently was the Kaam Mango Abhiyan carried out in early 2014 to help workers with large-scale demand for work. However, the results of this campaign were limited; a large proportion of workers who applied for work did not get any work or unemployment allowance.
The second positive initiative was conducting social audits in 50 gram panchayats of the state with involvement of local activists working on MGNREGA. Although the audit teams brought to light many irregularities, disciplinary and remedial action were taken in only a few cases. Also, the state has been unable to carry out similar social audits in other gram panchayats as it is yet to put in place an independent social audit unit.
The most recent effort worth mentioning is Yojana Banao Abhiyan, a state-wide campaign, conducted in January–February 2016 to plan MGNREGA works for 2016–17 (along with works to be taken up with funds devolved to gram panchayats as per the recommendations of the 14th Finance Commission). The campaign mobilised lakhs of people to plan works for their village to meet needs of basic infrastructure and augment livelihoods through better management of natural resources. Over 10 lakh MGNREGA schemes have been planned in this campaign across Jharkhand.
Jharkhand has also made good use of the financial support provided by the ministry to put in place “cluster facilitation teams” in 76 blocks of the state for about three years (July 2014 to March 2017). These teams comprising of people with expertise in Integrated Natural Resource Management, civil engineering and mobilisation have been helping with the planning, estimates, laying out and measurement of MGNREGA works. Members of self-help groups are playing an active role in this project by making workers aware of their entitlements, helping them apply for a job card, work and bank account and supervising worksites as mates. The outcomes have been quite encouraging in some of the blocks where this project is being implemented: the scale of work has more than doubled compared to the previous year, some households have received a hundred days of work, many useful assets have been created and participation of women in the employment guarantee programme has increased considerably.
Finally, it is also important to mention the findings of a recent study of 926 MGNREGA wells across six districts of the state. The study found that 70% of the sanctioned wells were complete (with or without a parapet); 95% of the completed wells were being used, and the estimated rate of return on MGNREGA expenditure for all wells (complete or incomplete) was a respectable 6% in real terms (Bhaskar and Yadav 2015).7
Concluding Remarks
A decade after the implementation of MGNREGA, the programme is in need of serious attention; workers’ entitlements are being curtailed, work is being denied routinely without any compensation and long delays in wage payments are forcing rural households to seek exploitative sources of employment. The responsibility for this situation stretches from the political leadership to the local officials and functionaries.
Jharkhand can certainly improve the delivery of the act by building on its positive initiatives. It also needs to urgently establish an independent social audit unit and draft rules for transparency and grievance redressal, activate its rules for payment of unemployment allowance and compensation for delayed payment. It needs to take action on complaints, impose fines on officials and functionaries violating the act, fill the large vacancies of MGNREGA functionaries and strengthen the monitoring of the programme.
A measure which has not been tried in the state but has immense potential of reviving the programme is supplementing the somewhat modest salaries of MGNREGA functionaries with bonuses which are linked to their performance, on the scale of employment generated, proportion of assets completed and rate of timely payment of wages. Taking these much required measures will need strong political will and sustained pressure from the people.
Notes
1 See Singh (2015) for a brief account of delays in wage payments in Adilabad District of Telangana.
2 As per the Management Information System (MIS), workers across the country were due `534 crore as unemployment allowance from 2012–13 to 2014–15. The payable unemployment allowance has to be approved by programme officers (the district-level nodal MGNREGA functionary). However, this entire amount was rejected by the respective programme officers for one reason or another.
3 The vacancy rates were 16% for gram rozgar sevak (to be appointed one per gram panchayat), 39% for block programme officer (to be appointed two per block), 45% for computer assistants (to be appointed one per block), 50% for assistant engineer (to be appointed one per block), 45% for junior engineer (one to be appointed for every five gram panchayats) and 38% for account assistant (to be appointed one per block).
4 For example, the monthly salary of `15,300 of Jharkhand’s block programme officer is amongst the lowest remuneration for these functionaries in the country. Functionaries in equivalent posts in Tamil Nadu and West Bengal are paid as much as `30,000–`35,000 a month.
5 For more on experience of business correspondents in Jharkhand, see Bhatti (2012) and Yadav (2012).
6 Workers without Aadhaar who demand work have to seek “exemption” from the requirement of this identity number via the MGNREGA MIS. They are allotted work only after their request is approved by the district administration.
7 An earlier study of 11 completed MGNREGA wells in Ratu block of Ranchi District also found the irrigation from the wells to substantially increase the income from agriculture in the command area (Aggarwal et al 2012).
