Under-compensating wage delays in MGNREGA

How a convenient accounting practice undermines the MGNREGA and allows the state to indulge in long delays in wage-payments with no consequences.

The Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) provides a minimum of 100 days of work in a year for every rural household at a minimum wage. Most MGNREGA workers have limited savings and it is critical for them to get paid for their work in a timely manner. Recognizing this, the framers of the Act built-in a provision that workers should be paid compensation if they are not paid within two weeks of a cycle of work. The Libtech India team investigated mechanisms used by the government to delay payments, yet avoid paying compensation to workers using convenient accounting practices.

This paper establishes that contrary to the claim that 53% of payments are made on time only 21% are actually made within the stipulated 15 days. There is a severe underestimation of delay, thanks to compensation is either not paid to workers, or when it is paid, workers receive a smaller amount than is due. This analysis is based is based on an analysis of 9 million during FY 2016-17 across 10 states.

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Submitted Paper: “Analysis of Payment Delays and Delay Compensation in NREGA Findings across Ten States for Financial Year 2016-17.” By: Rajendran Narayanan, Sakina Dhorajiwala, Rajesh Golani.

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