Work without Wages [Economic and Political Weakly]

👉Work without Wages👈

Delayed wage payments and inadequate wage revisions rob MGNREGA of its soul.

Timely payment of wages is central to the rights-based realisation of minimum guaranteed income under the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA). The NREGA Sangharsh Morcha, which tracks the implementation of the act, found that 64%, 86%, and 99% of the orders for wages in February, March, and April, respectively, remained unprocessed. While non-payment or delays in payment are not new to MGNREGA, recent changes in the structure of wage payments have only worsened the problem.

The Narendra Modi government, in order to ensure “leakage proof payment” through the National Electronic Fund Management System (NeFMS), ordered that payments happen through a fund transfer order (FTO). Payments through Aadhaar-seeded bank accounts were also introduced subsequently. While ensuring that wages reach workers without any leakages is laudable, its practicability at the ground level as well as its implications remains a concern. Even as the execution of such measures can be improved over time, they reverse the process of decentralised participatory development.

Under the previous arrangement of a revolving fund, implementing agencies at each level had their own accounts and authorised signatories for making payments. This was a devolutionary fund transfer arrangement to strengthen decentralised development by local institutions. Under the NeFMS, funds remain centralised in one account under the control of the Government of India, while the allocation of money to the implementing agencies is only notional. The implementing agencies generate claims for wages as per the muster rolls through FTOs. After the generation of FTOs, the programme officer uploads them for payment. The process is the same in the case of payment for material costs to the suppliers, a process free from human interference and, hence, free from leakages as well. However, the process has debilitating weaknesses.

First, there is a problem of pending FTOs. As per Management Information System (MIS) data, on 19 April 2018, 19.55% of the total FTOs for 2017–18 were pending and 2.38% were rejected. Altogether, these account for 21.93% of the total FTOs generated. Reports from different states suggest that sometimes payments are not transferred to the accounts of the MGNREGA workers and suppliers for three to four months, even more in some cases, all due to pending FTOs. This is corroborated by growing evidence of pending wage arrears and material payments in many states.

If the centre does not disburse the arrears, the states are unable to make payments through their own resources and, later, claim it from the union government like before. In 2016–17, when there were accumulated arrears of₹ 12,000 crore—almost one-fourth of the total budgetary allocation to the programme—states like Jharkhand and Tripura ensured payments to workers through their resources. Now, with the NeFMS, this is no longer possible. A serious implication of this is the violation of the rights of workers who are entitled to receive full payment of their wages within 15 days of working in the programme. Without the “guarantee of payment,” the work programme loses teeth. Over time, it loses appeal among workers, who are then driven to more precarious forms of work and distress migration. The poor need cash on a daily basis to meet their consumption needs, and are forced to turn away from the programme and look for alternative employment. This delay of payments and uncertainty about wages rob the soul of the programme.

Second, the centralised mechanism reverses the process of strengthening panchayati raj institutions, which, even after 25 years of being a part of federal constitutional arrangements, remain weak for lack of devolution of power, functions, and functionaries: the three Fs. MGNREGA, in one stroke, provided all three. In many of the states, for the first time, gram panchayats opened bank accounts, and received money on a regular basis in their accounts. These processes that empowered gram panchayats became redundant after the introduction of the NeFMS and FTOs.

Delayed wage payments need immediate attention, but there is a need to revisit the wage policy as well. While the Ministry of Rural Development revises the wages on an annual basis based on the consumer price index for agricultural labourers, the minimum and actual wages for agricultural labour in many states are now higher than the MGNREGA wages. This is a ­complete reversal of the situation from when the programme commenced in 2006. In fact, the prescribed agricultural wages and actual wages in many states were lower than the prescribed minimum wages of₹ 60 under MGNREGA in 2006. This had made the programme highly attractive for casual labour. It corrected wages upwards in rural labour markets. However, the reversal of this situation has made MGNREGA unattractive to workers in many states. An indication of this is that women workers join the programme, while male workers look for alternative employment with higher wages.

Providing a minimum wage rate that is lower than the prevailing wage rate is only a de jure guarantee. Should wages not be revised in a manner that make it a de facto guarantee? The guarantee of payment and a viable minimum wage rate that is pegged on the prevailing market rate are indispensable to the raison d’être of MGNREGA.

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