‘Release MGNREGA Funds’: Parliamentary Panel Flags Delay by Union Govt, Calls For Wage Revision

 ‘Release MGNREGA Funds’: Parliamentary Panel Flags Delay by Union Govt, Calls For Wage Revision

The standing committee on rural development and Panchayati Raj also recommended that the government immediately release West Bengal’s funds, and that the Aadhaar based payments be made optional.

New Delhi: A parliamentary standing committee has flagged persistent delays in the disbursement of the Union government’s share of funds under the Mahatma Gandhi National Rural Employment Guarantee Act 2005 (MGNREGA) and recommended revision of wage rates to capture the real impact of inflation on rural wages. Meanwhile, it has suggested that the government should consider implementing a uniform wage rate across the country.

The committee has also recommended that the number of working days be increased from 100 to 150, Aadhaar-based payment system be made optional, and funds not released to West Bengal be released at the earliest.

The recommendations were made on Wednesday, March 12, by the standing committee on rural development and Panchayati Raj (2024-25) headed by Congress MP Saptagiri Sankar Ulaka, that presented in Lok Sabha the fifth, sixth and seventh reports of the committee on demands for grants (2025-26) pertaining to the department of rural development (Ministry of Rural Development), department of land resources (Ministry of Rural Development) and Ministry of Panchayati Raj.

Revision of wage rates

The committee said that one of its “longstanding concerns” had been the revision of wage rates and the disparity in wages across different states and union territories, and that the “current linkage of MGNREGA wages to the Consumer Price Index for Agricultural Laborers (CPIAL) may not accurately reflect inflation trends.”

“The Committee believed that this index does not fully capture the real impact of inflation, and therefore, the method of wage calculation must be reviewed and updated on a priority basis to reflect actual economic conditions at the ground level,” it said.

The committee said that since the scheme is primarily funded by the Union government, it has recommended that the Ministry of Rural Development consider the implementation of a uniform wage rate across all states and union territories.

“This would help ensure fairness and consistency in wage payments under the scheme,” it said.

MGNREGA (enacted in 2006) was implemented by the Department of Rural Development and provided at least 100 days of guaranteed wage employment in a financial year.

Persistent delays by Union government

The committee has flagged persistent delays in the disbursement of funds from the Union government’s share under the scheme. It said that according to the information provided by the Department of Rural Development as of February 15, total pending liabilities of both wage and material components under the scheme is Rs 23,446.27 crore, which accounts for 27.26% of the current budget.

“This accounts for 27.26% of the current budget, meaning that more than one-fourth of the allocated funds will be used to clear previous years’ dues. Consequently, the actual working budget for the current financial year is reduced to ?62,553.73 crore, significantly limiting the scheme’s capacity to function effectively and meet its primary objective of preventing rural distress and ensuring livelihood security,” the report said.

Therefore, it added, there is a need to take immediate steps to ensure the timely release of the Centre’s share of funds under wages and materials and strengthen coordination with state Governments to prevent further delays in disbursement.

Release funds to West Bengal

While the TMC-led West Bengal government has been demanding that the Union government’s MGNREGA funds be released to the state, the standing committee has doubled down in its report and recommended that the state’s rightful dues be paid.

“The Committee recommended that West Bengal receive its rightful dues for all eligible years, except for the year currently under dispute in court. Additionally, the pending payments must be released without delay to ensure that ongoing rural development projects are not stalled and that intended beneficiaries do not suffer due to financial constraints,” it said.

Since 2021, the BJP-led government at the centre has stalled funds to West Bengal citing irregularities in the implementation of the scheme.

Scrap Aadhaar-based payment, increasing work days

The committee has also flagged that the mandatory Aadhaar-based payment system (ABPS) should not be made mandatory “due to operational challenges that have led to exclusions of genuine beneficiaries” where workers have been wrongfully removed from the system due to discrepancies between their Aadhaar details and job card records.

In December, the Union government informed parliament that it has no role in job card deletions and its responsibility lies with the state governments.

When asked about deletions of job cards due to the introduction of the Aadhaar-based payment system under MGNREGA, Union minister of state for rural development Chandra Sekhar Pemmasani said that the “central government does not have any role in job deletions.”

While the government has maintained that MGNREGA is a “demand-based” scheme, the standing committee in its report has recommended that the nature of work be diversified under the scheme and the number of work days be increased from 100 to 150.

“The Committee were of the firm opinion that the ‘need of the hour’ is to further diversify the nature of works under MGNREGA in such a manner and through such mechanisms that could also propel the number of guaranteed working days under MGNREGA to at least 150 days from the current 100 days,” it said.

Courtesy: The Wire

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