Delay in MGNREGA payments higher in states announcing farm loan waivers: SBI report

Representative image

Despite a decline in delayed payments to labourers under the MGNREGA over last two years, some of the big states continue to be a drag.

Nationally, 18 percent of the payment was delayed under MGNREGA. But in some of the bigger states, nearly 40 percent of the payment reaches beneficiaries post the deadline.

“Apart from eight north-eastern states, the big states that have delayed payments more than the national average were Bihar (39 percent payments were delayed), Uttar Pradesh (36 percent), Punjab (30 percent), Maharashtra (27 percent) and Karnataka (23 percent). Interestingly, 4 out of these 5 states have announced farm-loan waivers in FY18 (Rajasthan has a lower than India average as a debt waiver has only been announced in Feb 2018),” said a report by State Bank of India’s research report SBI Ecowrap.

According to the report, this is likely to be positive for state finances as the waivers announced by Maharashtra, Rajasthan and Karnataka were outside their budgets (the waivers amounted to 25 percent of States' budgets).

The waivers announced by Uttar Pradesh (UP) and Punjab are part of their respective FY18 budgets.

“The delayed payments under MGNREGA or Mahatma Gandhi National Rural Employment Guarantee Act have declined significantly from as high as Rs 2.38 lakh crore in FY16 to Rs 67,956 crore in FY18. As a percentage of total payments, the share of delayed payments has decelerated continuously and sharply from 73 percent in FY15 to 18 percent in FY18,” the report stated.

Last year, reports had pointed out the long delays and the unremunerative and meagre increase in the wages under the employment guarantee programme. As per a report, from 2013-14 to 2017-18, only 4 percent of the calculated compensation was approved and only 61 percent of the approved amount was paid.

The wage rate revised at the end of March this year were anywhere between Rs 168 to Rs 273 per day.

As on October 20, 2017, there was 100 percent pendency of fund transfer orders (FTOs) in 19 States, including Assam, Bihar, Gujarat, Haryana, Karnataka, Madhya Pradesh, Maharashtra, Odisha, Punjab, Rajasthan, Tamil Nadu, Uttar Pradesh and Kerala, said the statement, figures from www.nrega.nic.in had showed.

As per the employment guarantee act, workers are entitled to compensation in case they do not receive their wages within 15 days of the work being done.

Within delayed MGNREGA payments, the share of more than 90 day payments is now at 8 percent (30 percent in FY13).

“This is encouraging as any payment delayed beyond 90 days possibly causes distress amongst rural community. It is pertinent to note that such delayed payments beyond 90 days had witnessed a spike in FY15-17 (as Aadhaar linkage was possibly getting done with bank accounts) after which it witnessed a sharp dip in FY18. We believe, there has been a continuous upsurge in Aadhaar enrolment in recent years that is enabling the Government to better target the beneficiaries of such payments,” the SBI report said.

Data in the report showed the total number of Aadhaar enrolments that was roughly 600 million in 2015 has now touched 1.18 billion in 2018. For the record, there are now 5 times many Aadhaar authentications daily (64 million) than card transactions at PoS (12.7 million).

Additionally, for 2018-19, there is no increase in the MGNREGA wage rates of ten states – Arunachal Pradesh, Bihar, Jharkhand, Mizoram, Nagaland, Rajasthan, Sikkim, Tripura, Uttar Pradesh and Uttarakhand.