Current General Studies Magazine: "Right to Work and Timely Wages" September 2016

Current General Studies Magazine (September 2016)

General Studies - III "Economy Based Article" (Right to Work and Timely Wages)

MGNREGA, one of the world’s largest livelihood programmes, is a pioneer as far as workers’ rights are concerned. Notwithstanding the recent purported budget increase and an announcement to use “space technology” for its monitoring, the programme — and the budgetary exercise — could be pointless given that essential legal safeguards are being trampled regularly. MGNREGA’s robustness owes to provisions such as unemployment allowance, when work is not provided on demand, and compensation for delays in wage payments beyond 15 days. Crucial provisions that enable the right to work and the right to timely wages have been repeatedly violated. These matters are being heard by the Supreme Court based on a public interest petition by Swaraj Abhiyan with regard to drought relief.

In May 2016, the apex court had ordered immediate disbursement of compensation against delayed payment of MGNREGA wages. But merely 4 per cent of the total dues were paid as of January 2017 across all the states (calculations are based on reports accessed on 29th January, 2017 from MGNREGA website [R14.1 Delayed Compensation FY: 2016-2017] by taking a ratio of the total amount paid to the total amount payable). In a recent hearing, the division bench of the court expressed dismay: “We [the Supreme Court] pass orders. They [state governments] don’t obey and you [central government] throw up your hands”.

MGNREGA was designed to be bottom-up and demand driven — a labourer should get work within 15 days of requesting for it. However, inadequate and untimely release of funds from the Centre have made the programme top-down and supply-driven. This year, more than half the states have run out of funds; the current liability is Rs 3,649.38 crore. Work is allocated only when funds are available as opposed to when the demand for work is registered. There are several instances where the programme’s Management Information System (MIS) has been manipulated to match the date of work allocated with the date of work demanded, thus precluding the need to even calculate any unemployment allowance. The MIS is supposed to automatically calculate and create a report for the unemployment allowance. On several occasions,, the authorities have refused to accept legitimate claims for unemployment allowance.

According to Section 3 of the MGNREGA, the wages for a week of work have to be paid within 15 days of completion of a work week, failing which the workers should get a compensation for each day’s delay. At present, there are at least three key concerns in this regard — one, the method of calculation of the delay compensation is itself flawed, two, powers to reject the payment of compensation are arbitrary and, three, the rate of compensation is abysmally low.

The compensation should ideally be calculated from the 16th day of the completion of a work week till the day on which the workers actually receive their wages. However, the MIS calculates the compensation in a flawed manner. Instead of counting till the date when the wages are actually credited to the workers’ accounts, the MIS calculates delay in days till the payment date — a misnomer, this is actually the date on which the second signature is made to approve the funds transfer order (FTO) at the block. Thereafter the FTOs get collated at the district and the amount is then transferred to the workers’ accounts. It takes several days before the wages reach the worker even after the FTO is signed. The situation is even worse in the case of postal payments where the time taken for the wages to be transferred from the district to the village can extend to a year. The reports for delay in compensation, using this flawed method, are routinely generated in the MIS. The programme officer (PO) at the block verifies this report and has the authority to decide if this compensation has to be paid. This power is repeatedly abused and most POs reject the payment of compensation. This defeats the purpose of an automated report.

In 2005, when this employment guarantee act (then NREGA) came into force, workers were entitled to a payment of up to Rs 3,000 for delayed wages to commensurate with the Payment of Wages Act (PoWA). The revised schedule of the act has drastically reduced the compensation rate to 0.05 per cent per day of the pending wages and removed the reference to the PoWA.

The pillars of transparency and accountability are in peril with respect to the two key provisions of the act. Funds for the work should be made available throughout the year and checks should be put in place to ensure timely and complete entry of work demand in the MIS. The delay compensation should be automatically calculated based on the date on which the wages are credited to the workers’ accounts and should be deposited directly, electronically. This should be done without any administrative interference.

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