The Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) provides 100 days of work in a year for every rural household at a minimum wage. Because of MGNREGA, for the first time in the country, a transaction-based management information system (MIS) has been made available in the public domain, a feather in the cap of transparency. An essential safeguard in MGNREGA is delay compensation to be paid when workers do not receive wages within 15 days of completion of work. Despite several attempted measures, payment delays are rampant and the method of calculating delay compensation is flawed leading to massive under-calculation of the true payable compensation. By analysing over 90 lakh transactions for the financial year 2016–2017 across 10 states, we observe that only 21% of the payments were made on time and the central government alone was taking an average of over 50 days to electronically transfer wages. On aggregate, in our sample, while the true total delay compensation payable is about Rs. 36 crores, only about Rs. 15.6 crores is being calculated in the MIS. The Ministry of Rural Development (MoRD) has acknowledged the correctness of the findings and the Supreme Court of India has also issued Orders to the MoRD based on these findings.
This is a preview of subscription content,to check access.
Access this article
Similar content being viewed by others
Dhorajiwala, Sakina, and Debmalya Nandy (2018), "Continued fund shortage, wage payment delays have put MGNREGA in Peril", The Wire, https://thewire.in/government/mgnrega-wage-payment-delays. Accessed 22 Jan 2019.
Government of India, Ministry of Rural Development (2014), Guidelines on compensation for delayed wages payment-reg., http://nrega.nic.in/Circular_Archive/archive/Guidelines_Compensation_delayed_wages_pay.pdf. Accessed 30 July 2017.
Government of India, Ministry of Rural Development (2016), Upscaling of National Electronic Management System (Ne-FMS) under MGNREGA, http://nrega.nic.in/netnrega/writereaddata/Circulars/1756NEFMS_Upscaling.pdf. Accessed 30 July 2017.
Management Information System, Ministry of Rural Development (2016), R14.1 delayed compensation FY: 2016–2017, http://mnregaweb4.nic.in/netnrega/state_html/delay_comp.aspx?lflag=eng&fin_year=2016-2017&source=national&labels=labels&Digest=DaNMcKCT4HZjxosanIifuQ. Accessed 01 Aug 2017.
Maneka Gandhi vs Union Of India (1978), Supreme Court of India, https://www.sci.gov.in/jonew/judis/5154.pdf. Accessed 29 May 2019.
Ministry of Finance, Department of Expenditure (2017), Office memorandum on delay in payments of MGNREGA—Study of PFMS data—Reg.
Narayanan, Rajendran, Sakina Dhorajiwala, and Rajesh Golani (2017), "MGNREGA payout delays underestimated", Business Standard, https://www.business-standard.com/article/opinion/mgnrega-payout-delays-underestimated-117080701296_1.html. Accessed 08 Aug. 2017.
Olga Tellis & Ors v. Bombay Municipal Corporation & Ors (1985), Supreme Court of India, https://www.sci.gov.in/jonew/judis/9246.pdf. Accessed 29 May 2019.
We would like to thank Rosa Abraham, Anjana Thampi and Prof. Jean Drèze for their helpful suggestions. We would like to thank Azim Premji University, Bengaluru for research support on this project titled “People’s Experience of Government to Citizen Payments”.
Springer Nature remains neutral with regard to jurisdictional claims in published maps and institutional affiliations.
About this article
Cite this article
Narayanan, R., Dhorajiwala, S. & Golani, R. Analysis of Payment Delays and Delay Compensation in MGNREGA: Findings Across Ten States for Financial Year 2016–2017. Ind. J. Labour Econ. 62, 113–133 (2019). https://doi.org/10.1007/s41027-019-00164-x