Sakina Dhorajiwala & Rajendran Narayanan: Rejected wage payments in MGNREGA

A wage payment to a labourer can be rejected for a variety of reasons, such as incorrect MIS entries and mismatch of names and bank account numbers

MGNREGA is a remarkable Act with its worker-centric provisions of the right to work and the right to timely wages. However, an over-reliance on technology as a panacea and a substitute for administrative and political will can be pernicious. In May, the Supreme Court, in response to an ongoing PIL filed by Swaraj Abhiyan against the Union of India, ordered the Centre to release all outstanding MGNREGA funds to the states and admonished the Centre for "unconscionable delay".

Here we focus on a special case of wage payment delays, called "rejected payments", arising in MGNREGA. These problems are largely technical in nature, whose solutions often require a technical fix, some of which the block officials are aware of and others that are beyond their scope.

A wage payment to a labourer can be rejected for a variety of reasons, such as incorrect entry of account numbers in the MIS, mismatch of names and bank account numbers, among others. In some cases, if the labourers have taken some loans from the bank, then their MGNREGA payments are rejected to offset the loan amounts. Several labourers have not been paid wages because their accounts have been opened as Non-Resident (NRE) accounts.

The total amount of "unprocessed rejected payments" owing to such technical reasons alone in just 10 districts of Chhattisgarh is a staggering Rs 7.64 crore. And this is a conservative figure. It is only a part of the total amount actually rejected in each of these districts, as per data retrieved from nrega.nic.in on August 8 this year.

The table shows the total unpaid amount by various sub-categories of rejected payments for Korea, which is one of the districts we surveyed. A large chunk of unpaid wages (Rs 1.3 crore out of Rs 1.64 crore) arise due to incorrect account numbers in the system, referred to as "no such account". This constitutes the most common reason for the rejection of payments. While the MGNREGA website specifies the rejection reasons, it does not give any explanation or the meaning of these reasons.

MGNREGA payments can be rejected owing to Aadhaar-related problems. This is evident, for example, in Korea district, where labourers have not been paid more than Rs 11.6 lakh for such reasons as "inactive Aadhaar".

Over the past year, there has been an ever-increasing rush to seed Aadhaar-linked bank accounts with MGNREGA. The officials at the Panchayat and block level indicate that there is "pressure from the top" to increase Aadhaar enrolment and seeding. While the government may use Aadhaar for MGNREGA payments, there has been an absolute lack of clarity on the process to be followed. In the frenzy to meet targets to open Aadhaar-linked bank accounts, officials have made it compulsory for labourers to sign a consent form without any explanation.

Very often, new bank accounts have been opened for labourers with existing MGNREGA accounts, causing immense confusion among labourers and officials alike. We observed that beneficiaries are told that they would be denied their wages and rations through the PDS if they did not sign the consent form. In this context, the phrase "Aadhaar coup" used by Jean Dreze seems appropriate.

Labourers continue working, unaware of the fact that wages for every subsequent work-week would also be rejected unless the existing errors are rectified. Reports of such rejected payments are routinely generated on the MIS but efforts are seldom made by the administration to communicate with the labourers and take corrective measures. Workers whose payments are rejected remain clueless as to why they have not received their wages, while others who worked on the same dates got paid, albeit much after the mandated 15-day period. The remedy for this malady requires just a modicum of administrative and political will, which is largely lacking.

The genuineness of various infrastructure limitations notwithstanding, the labourers, mostly landless and extremely marginalised, should not bear the brunt of what is a shortcoming of the state and the administration. In addition to rectifying the technical errors at the block/district level, the Centre should release all outstanding funds and clear the arrears so accrued as "rejected payments".

Technology can be a powerful enabler provided the design is worker-centric. Even this would fail in the absence of recognition that technology by itself cannot cure anything. It is important to have strong political willingness and accountability checks to ensure that the laws mandated in the Act are followed.

Sakina Dhorajiwala is a student of Public Policy at St Xavier's College, Mumbai. Rajendran Narayanan teaches at Ashoka University, Sonepat. The views expressed are personal