A decade after the passage of the National Rural Employment Guarantee Act (NREGA), rural workers have little reason for cheer. They are facing an acute shortage of work, long delays in receiving wages and several other violations of their entitlements. This grim situation is primarily the result of various moves by successive central governments to undermine NREGA across the country.

The dilution of NREGA was started by UPA - II itself, even while its primary constituent, the Congress Party, lauds itself for bringing in this Act. Budgetary allocations for the programme were drastically reduced from almost 1 percent of the GDP in 2008-09 to about 0.3 percent in 2013-14.

In 2011, NREGA wages were delinked from minimum wages and they have stagnated in real terms for the past several years. Local administrations are unable to cope with the constant reengineering of NREGA by the Ministry of Rural Development and the excessive reliance on technology for the implementation of the programme.

The NDA government has further honed the attack on NREGA. Soon after coming to power last year, the rural development minister announced the government’s intention of introducing changes to NREGA which would further limit the scope of the Act. The government’s first suggestion was to restrict the Act to the 200 poorest districts of India alone, based on the untenable justification that an employment guarantee programme is not required in the rest of the country.

The second amendment that was proposed was to change the current wage-material ratio of 60:40 to 51:49, on the assumption that increased expenditure on material (as compared to labour) would create more useful and durable assets. This argument is also flawed; many works that require virtually no material (such as land levelling and staggered trenches) can do wonders to increase agricultural productivity on farms. Also, lowering the wage-material ratio without increasing the overall expenditure on the NREGA would severely decrease the scale of employment generated under the programme.

Eventually, however, better sense prevailed and these regressive changes were not implemented. Nevertheless, the government has now brutally slashed funding for the NREGA. Given that it is the Central Government’s responsibility to give 90 per cent of funds for the NREGA, the budgetary cuts have put de facto caps on the employment that state governments are able to provide to workers.

Since the NREGA is a demand-driven programme which entitles every rural household to at least 100 days of work in a year, these caps have led to clear violations of the Act itself. Apart from the damage caused by central governments, the apathy of many states towards the programme has worsened the situation.

Villagers constructing a farm pond, under the National Rural Employment Guarantee Act. Pic courtesy: Ankita Aggarwal

To better understand the deleterious impacts of the slow destruction of the NREGA on workers, let us take a close look at what is happening in Jharkhand, a state which has tremendous potential for work under this programme – a potential that has already been realised in limited ways, for example through the construction of close to 100,000 wells that have substantial productive value.

There is ample evidence of the realised benefits of the NREGA in the state. To cite just one example, in a village of Hatgamharia Block of West Singhbhum, about 40 families have been able to significantly increase their incomes and food security, thanks to a series of farm ponds for harvesting rain water constructed under the programme.

With the help of improved access to irrigation, these families shifted from the traditional method to improved methods of paddy cultivation. While earlier they were able to grow rice just enough to meet their food requirements for 7-8 months a year, they are now food sufficient for the whole year round.

One would think that with such obvious affirmation of the merits of the programme, state and central authorities would be paying serious heed to strengthening it further and plugging loopholes where they exist. Sadly, the reality is very different.

Acute shortage of work

A labour budget of Rs 1,070 crores had been approved for Jharkhand for the year 2014-15. In July last year, it was slashed by one third. The meagre amounts of funds that had been approved also trickled in late. However, it is the state government which is mainly at fault for these delays.

The central government releases the NREGA funds to a state only after receiving audit reports of all the districts. As some districts of Jharkhand delayed the submission of these reports by several weeks, labourers in the entire state suffered.

To tide over the shortages and delays in the release of funds from the central government, Jharkhand had lent its districts a total sum of Rs 130 crore from a state revolving fund, of which it has already recovered Rs 38 crore (the new state government is, however, still dragging its feet on approving an increase in the size of the revolving fund to Rs 203 crore).

Had the state not lent the districts money from the revolving fund, six of them would have been left with inadequate funds to make pending payments, let alone provide more employment. In February 2015, the state was left with less than Rs 30 crore of the central share, but it will receive more funds only in the next financial year.

Given the acute shortage of funds, many local officials are hesitant to open new works. The shortage of employment is hitting rural areas particularly hard right now, as the need for NREGA work in Jharkhand peaks in the months of January to May.

After waiting for several weeks, many workers have migrated to other areas in search of work. For instance, in Manika Block of Latehar, many workers left for other states in November last year. Some had to go as far as Kerala to get work. The lack of assurance of getting work under the NREGA when it is most required is a major reason for workers’ growing disenchantment with the programme.

Long delays in wage payments

Another reason why many rural workers of Jharkhand do not consider the NREGA an attractive alternative for supplementing their agricultural incomes is the long delay in receiving wages. As per the official Management Information System (MIS) of the NREGA, 31 per cent of the wages were paid with delays in this financial year.

This marks a six-fold increase in proportion of delayed wage payments, compared to last year. (Actual delays in wage payments are much higher, as workers are often made to work before the muster roll is generated and the MIS data does not include the time taken in the manual transfer of funds from sub-post office to branch post office).

Workers who are paid their wages with delays are entitled to compensation. As per the original Schedules of the Act, workers were entitled to Rs 1,500-3,000 as compensation. But two years ago, the Ministry made compensation payable at the rate of 0.05 per cent of the unpaid wages per day of the delay period.

To put this in perspective, consider a worker of Jharkhand who received wages for 20 days of work three months late. She will be entitled to a compensation amount of only Rs 142!

Worse still, in the absence of rules on recovery and payment of the compensation amounts, Jharkhand is not even paying these meagre sums of money to workers who have to wait for weeks – or even months – for their wages (same is the case with unemployment allowance).

Fighting on a case-by-case basis for payment of compensation will cost much more in expenses related to photocopying documents, travel etc than the compensation amount itself. Aggravating matters further, the Ministry has exempted payment of compensation in case the delays happen due to shortage of funds.

Reasons for delay

The Ministry’s rush to implement the “Electronic Fund Management System” across the country from April 2014 has contributed to wage payment delays in Jharkhand. This system of fund management, introduced to decrease the problem of “parking” of unspent funds with gram panchayats and delays in payments and increase transparency in fund flows requires the generation of muster rolls, wage lists and pay orders to take place online at the Block or at the gram panchayat level.

Women working at a NREGA site. Pic: Ministry of Rural Development, Government of India

With several parts of Jharkhand lacking reliable Internet connectivity even at the Block, long delays in these processes, and consequently in crediting wages in workers’ accounts, are inevitable. Although the state’s Rural Development Department has issued clear timelines for the various processes mentioned above to ensure payment of wages within 15 days, in the absence of recovery of compensation amounts, these guidelines are being flouted routinely.

The inability of the government to improve the infrastructure of post offices in rural areas is another significant reason for delays in wage payments. This is especially a concern in Jharkhand, where (according to the MIS) three fourths of all NREGA workers have a post office account.

Although the government is pushing for a shift to banks, most workers have a harrowing experience opening a bank account. They usually have to make several trips to the bank branch to open an account and are often shoddily treated by the bank employees. Some bank branches have in fact refused to open accounts for NREGA workers and have delegated this task to the local Pragya Kendra (Common Service Centre), where applicants are often charged for opening an account.

Many bank branches have stopped issuing passbooks, which makes it extremely difficult for workers to keep track of the money in their account. Instead of opening more branches in rural areas to reduce distances to banks and crowding in them, the government is relying on the banking model of “Business Correspondents,” something that is yet to be proved successful.

The government is also indifferent to another primary cause of wage delays– the inability of workers to independently learn about the crediting of wages in their account. Most workers rely on their mates for this information, who are in turn informed by the postmaster or bank employee. However, if these functionaries delay giving the information, by mistake or intentionally, workers are forced to wait for their wages even after the money has been credited in their accounts.

This problem can be dealt with quite easily by distributing wage slips to workers after wages are credited in their accounts. Banks can also try to experiment with the system of text message alerts on phones to inform workers about crediting of wages in their accounts.

Other problems

The Jharkhand government also doesn’t seem serious about tackling corruption in the implementation of the NREGA. Most social audits that are organised by the administration are a big farce. There are only 10 ombudspersons for the 24 districts of the state. The Rural Development Department is yet to pass transparency and grievance redress rules.

Shortage of NREGA functionaries is another serious issue in the state. Several gram panchayats have to share a Gram Rozgar Sevak (a gram panchayat level functionary entrusted with the task of implementing the Act). Many blocks do not even have a dedicated Block Programme Officer (BPO).

Despite the state government’s order on appointment of two BPOs in blocks having more than 20 gram panchayats, this is virtually unheard of. Earlier this month, when a group of activists, of which the author was a member, informed Gumla’s Deputy Development Commissioner that the 13 gram panchayats of Raidih Block of the district have only 10 Gram Rozgar Sevaks in total, the official dismissed the complaint and said that nothing can be done about this.

The gross shortage of “Junior Engineers” in Jharkhand for preparing technical estimates and measuring NREGA works not only causes delays in wage payments, but is also one of the reasons for the poor quality of many of the assets created under the programme.

To address this problem, around mid-2014 the Ministry had instructed all the states to appoint one “Barefoot Engineer” for every 2,500 households of NREGA workers. These Barefoot Engineers would be persons from the local community with basic literacy skills who would be trained for carrying out the responsibilities of Junior Engineers. But the Jharkhand administration is still dragging its feet on the selection, training and appointment of such technical assistants.

Repeated instructions by the government to link Aadhaar with the NREGA (and also other social programmes), despite Supreme Court orders to the contrary, are causing grave problems in implementation on the ground. The stress on complete enrolment of workers in Aadhaar and “seeding” of workers’ Aadhaar numbers in the MIS has left NREGA functionaries with little time to actually provide work on demand and ensure timely payment of wages.

There have been reports of NREGA functionaries in Latehar and Palamau cancelling registration of workers without an Aadhaar number, thereby making them ineligible from working under the programme.

If implemented in its true spirit, the NREGA can revive the rural economy of many parts of the country. It can bring much needed relief in the lives of millions of rural workers, who have to routinely face poverty, hunger and distress migration. By providing wage employment to rural women at their doorstep, the Act can enable them to secure some economic independence.

Many productive assets, such as tree plantation and farm ponds, can bring additional incomes in villages. Implementation of the law can also be a useful exercise through which gram panchayats learn about their role in local democracy. It will be a real disappointment if this opportunity is missed.