Direct release of wages to MGNREGA workers okayed

The Union Cabinet on Wednesday approved release of wages directly to the accounts of the workers engaged under the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA). The Cabinet, chaired by Prime Minister Narendra Modi, approved the scheme for better implementation of the MNREGA and provide empowerment of states, sources said.

Finance Minister Arun Jaitley last week allocated Rs 7,000 crore for direct benefit transfer under MGNREGA, while seeking Parliament approval for supplementary demand for grants.

According to the scheme, the wage component of MGNREGA will be released following the State Employment Guarantee Fund window direct to the workers’ accounts based on a fund transfer order to be generated by states’ implementing agencies in accordance with procedures prescribed by rural development ministry. The proposed system would benefit all stakeholders and improve overall efficiency of implementation, and workers would be assured of payment of wages in the second day of the pay order generation, official sources said.

Officials said while state governments would be able to spend more time in planning and improving the process efficiency without bothering to manage funds for implementation, the Central government would gain by releasing what is actually expendable.

The gram panchayats would also be empowered to take up work according to the agreed labour budget, without struggling for release of funds.

Sources say that despite implementation of the electronic fund management system (e-FMS), delays in payments have been increasing due to delays in release of funds by the central government, multi-level release system, continued parking of funds at various levels and inability of implementation agencies to get funds in time for payment.

This, they added, called for further steps to improve the system to assure timely availability of funds according to demand.