Women working on an MGNREGA site building a pond to assist in farming and water storage in Jhabua, Madhya Pradesh. Wage payments under MGNREGA for nearly 92 million workers in 19 states have not been made, data show.

Wage payments under the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) have been frozen in 19 states as of October 31, 2017, official data show.

In Haryana, wages have not been paid since August 31, 2017. In 12 states, including Jharkhand, Karnataka and Kerala, payments have not been made since September 2017. No payments have been made in six states including Maharashtra and Madhya Pradesh since October 2017.

States With 100% Pendency Of Fund Transfer Orders
State Payments Pending Since Active workers (In million)
Haryana August 31, 2017 2.07
Assam September 6, 2017 0.66
Karnataka September 7, 2017 6.22
West Bengal September 7, 2017 13.79
Punjab September 11, 2017 1.02
Tamil Nadu September 11, 2017 8.67
Uttar Pradesh September 11, 2017 9.31
Chhattisgarh September 12, 2017 4.91
Rajasthan September 14, 2017 7.45
Jharkhand September 15, 2017 2.6
Kerala September 18, 2017 2.17
Odisha September 18, 2017 5.1
Himachal Pradesh September 19, 2017 1
Uttarakhand October 2, 2017 0.93
Bihar October 3, 2017 3.52
Tripura October 6, 2017 1.03
Gujarat October 7, 2017 5.57
Madhya Pradesh October 7, 2017 8.81
Maharashtra October 7, 2017 7.47

Source: MGNREGA, MGNREGA State Fact Sheets Note: Data for other states unavailable; data as on October 31, 2017

Over 92 million active workers may not be getting their wages on time and the delayed wage payments amount to nearly Rs 3,066 crore, according to a statement by NREGA Sangharsh Morcha, a network of grassroot organisations.

"Immediate action has been taken on proposals submitted so far by Madhya Pradesh, Uttar Pradesh, Tamil Nadu, Rajasthan, Chhattisgarh and Jammu & Kashmir and proposals have been processed," according to this statement by the ministry of rural development on October 27, 2017.

It is mandatory for states to send audited reports of the previous financial year after September 30 every year for the central government to release the second tranche of funds.

The rural development ministry statement said Rs 40,480 crore has been released so far in this financial year, which is around Rs 4,500 crore more than the release during the corresponding period of the last financial year.

The ministry has also sought funds from the finance ministry to meet additional requirements.

Centre not clearing payments

The central government has not approved most payments for 20 days in March-April 2017, and 80% wage payments in May 2017 were not processed.

“While the central government has not approved funds for states that have not submitted audited statements of their funds on time, the government does not have funds for eight states: Gujarat, Haryana, Karnataka, Rajasthan, West Bengal, Mizoram, Nagaland and Jammu and Kashmir,” according to Ankita Aggarwal, co-convenor of the NREGA Sangharsh Morcha.

Process Of Making MGNREGA Payments

A Fund Transfer Order (FTO) is a demand that is first raised at the district level, and then at the state level for transfer of funds to the worker’s accounts. It is created electronically by the management information system (MIS) that maintains the electronic muster rolls with names of active workers under the scheme.

The FTO needs to be signed by two authorised signatories before being sent to the ministry of rural development. Since transfers are made through bank accounts, the FTO is first sent to the public financial management system (PFMS), a central government online application through which many social security payments are routed, and then to the nodal MGNREGA bank from which payments are credited.

When FTOs are pending, it implies that the PFMS has not responded to them, indicating that the government has not yet approved them. Almost no FTOs were processed for 20 days during March-April 2017, and 80% were not processed during May 2017, according to the statement by the NREGA Sangharsh Morcha.

Though payments have been approved by two signatories now, they have not been cleared by the central government.

Though there are no records of FTOs pending from Mizoram, Nagaland and J & K, all three states have negative balances in their financial statements.

Payments to be made within 15 days, compensation not paid

Workers must receive payments within 15 days of the closure of the muster rolls under MGNREGA guidelines. If the wages remain unpaid, the workers are entitled to seek compensation at a rate per day during the duration of the delay.

No legal compensation has been calculated for these delays. During the financial year 2016-17, the central government estimated the compensation to be only Rs 519 crore, 43% of Rs 1,208 crore that was actually due, Scroll.in reported in August 2017.

The rural development ministry calculates the compensation only on the basis of delays caused by the state government, the report said. The delay by the central government in making payments to the workers is not considered.

As much as 94% of the compensation due was not approved as of January 13, 2017, according to the 2017-18 budget brief by Accountability Initiative, an advocacy. Of the 6% approved, only 61% (Rs 8.7 crore) was paid.

Of Rs 34.7 crore payable as compensation for the current financial year, only Rs 3.6 crore, or 10%, has been paid, the NREGA Sangharsh Morcha claimed.

The rural development ministry has said that out of Rs 80.58 crore that has been approved as compensation since the provision of paying it came into force, Rs 51.4 crore (64%) has been paid.

The budget allocation for MGNREGA for the current financial year is Rs 48,000 crore, the highest ever under the scheme. As of October 27, 2017, Rs 40,725 crore--that is, nearly 85% of budget allocation--has been spent.

Eleven states have negative balances (including payments due) as per financial statements on November 3, 2017.

(Nair is an intern with IndiaSpend.)

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