Rs 250 crore to plug leakages in NREGS

It will take Rs 250 crore for the government to effectively plug leakages in payments under its flagship National Rural Employment Guarantee Scheme (NREGS) by installing biometric identification devices in around 250,000 panchayats covered under the scheme.

The government is exploring a banking correspondent model to deliver cash to workers using biometric devices as means to verify identity of beneficiaries. This system will have designated bank correspondents for specified panchayats who will carry biometric devices and deliver cash to workers covered under the scheme. A single biometric device costs around Rs 10,000.

Under the NREGS, the government ensures 100 days of employment at Rs 100 a day to every rural household.

Though the model is already in place in a few districts of states like Rajasthan and Bihar, Orissa will be the first state to have all its 30 districts covered under this. The state has recently signed a memorandum of understanding with State Bank of India in this regard.

“The focus of the second phase of NREGS should be to plug the deficiencies in the current system before starting on plans to expand the scheme. The banking correspondent model using biometric identification will contain duplication of job cards and misplaced allocations of benefits, and the cost to achieve this is minimal,” said Mihir Shah, member, Planning Commission.

Currently, payments to workers under this scheme are made through verifying job cards in banks and post offices before cash is given to them. However, this model of delivery system has exposed many gaps in the government’s flagship scheme. Both the issuance of job cards and cash delivery system currently in place have been criticised for being misused by middlemen.

The problem in the delivery system is that banks and post offices, through which majority of the payments are done, are sparsely located, making it difficult for workers to individually go and claim their money. Therefore, they have to rely on middlemen who offer to deliver their money, using their job cards and charging a percentage of the money for their service.

The new model seeks to do away with such deficiencies and ensure that funds reach the beneficiaries.

The government, in the wake of a weak monsoon, is focusing on digging of wells and ponds in farms of up to 2 hectares to ensure development of sustainable rural infrastructure which will combat the effect of drought.