For the last three years, workers under the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) in Andhra Pradesh have not been paid the mandated compensation for delay in payments. The Act governing the scheme mandates that wages are to be paid within 15 days from the date the work is completed. In case of delay, workers are entitled to payment of compensation at the rate of 0.05% of the unpaid wages per day from the 16th day onwards. However, on average, the Union government takes 26 days to transfer the wages to the bank accounts of NREGA workers in Andhra Pradesh. The reason for the delay is primarily with the Union government, but the Andhra Pradesh government does not calculate the compensation either.
The findings were part of an analysis by LibTech India, a team of engineers, social workers and social scientists working to improve public service delivery in India. The group analysed wage payments in FY20 (April 1, 2019, to March 31, 2020), FY21 (April 1, 2020, to March 31, 2021) and FY22 (April 1, 2021, to July 31, 2021) for a sample size of 130 panchayats chosen at random out of the 12,956 panchayats.
The team analysed 3.95 lakh transactions initiated by the Andhra Pradesh government and found that about 34% of MGNREGS workers remained unpaid as of August 10, 2021, for work carried out between April and July this year. The study estimates that the Andhra Pradesh government owes compensation to the tune of Rs 26 crore in FY22, Rs 12 crore for FY21, and Rs 36 crore in FY20.
The team sent their findings to the Andhra Pradesh government and to the Union government, calling for wages to be paid on time and also for compensation to be paid.
LibTech points out that the Union government has not acknowledged the compensation that has to be paid as per the Act. “The 13th report of the Parliamentary Standing Committee on Rural Development and other official Union and state government documents has not reported any delay in the compensation being paid for three years (FY20, FY21 and also four months of FY22),” says Chakradhar Buddha, program officer at LibTech India.
Researchers also found that less than 20% of the credited payments were completed within the stipulated time of 15 days. About 3% of transactions took more than 2 months to get processed. For the transactions that are still pending, the delays are already over 30 days.
MGNREGS payments are processed in two stages — after the work is completed, a Fund Transfer Order (FTO) is generated by the state and digitally sent to the Union government. This is Stage 1 and is the state government’s responsibility to initiate FTOs and has to be done within 7 days of the work being completed. The Union government then processes the FTOs raised by the states and transfers the wages directly to the workers’ accounts. This is Stage 2 and is the responsibility of the Union government to complete the transaction within 8 days as per guidelines.
During the period that data was analysed by LibTech, the time taken by Andhra Pradesh to issue FTOs has been steadily decreasing from 7.97 days on average in FY20 to just 2.96 days on average in FY22 (ongoing). However, the Union government takes more than three times the time to process payments.
Between April and July 2021, it took 25.82 days for the Union government to process the payments as compared to 6.78 days last year. According to LibTech, the Union government processed payments in less than seven days last year owing to the pandemic. However, this year with the second wave, they say the time taken is "intolerably high".
The Andhra Pradesh government does not calculate the delays faced during transactions in both stages.
“This non-acknowledgement and non-payment of delay compensation is in direct violation of the MGNREG Act, and of the Supreme Court orders dated May 18, 2018, in the Swaraj Abhiyan v Union of India case, which stated that the Union government must calculate the delay and pay compensation to the workers for the full extent of delays,” LibTech says in its report.
The report was sent to different stakeholder agencies at the state and at the union government level.
“The Union government’s argument has always been that FTOs being generated by the state is equivalent to the money being credited to the account. But that’s not accurate. It is like issuing a post-dated check and saying the deal is done but in reality, no money is actually being transferred,” says Chakradhar.