Sukhrani, 50, spends her MGNREGS wages on clothes and medicines for her family. Unemployed since four months at the time of this interview, she said the scheme owes her Rs 6,000. She has been buying milk on loan for two months, and has been forced to borrow food, money and clothes to make daily ends meet for her family of five.

Prajapati, who previously worked as a labourer at the local market in Mavai village in Uttar Pradesh’s Banda district, has been taking loans to get by. When he complains to officials about delayed wages, he is asked to continue working so that his pending wages get paid, he told IndiaSpend. Often, there is just five days’ work in two months, and MGNREGS wages have not increased his overall income, he said.
 
Millions of MGNREGS workers share Prajapati’s predicament–57% of wages due to workers were unpaid at the end of April 2018, as per government data.

 
 
This is the second of our three-part series on India’s vast rural jobs guarantee programme, part of our investigation of key government schemes’ performance in the run-up to the 2019 elections.
 
Delayed wages are routine
The world’s largest job-guarantee programme, MGNREGS promises 100 days of unskilled work to villagers. However, wage payments have been routinely delayed, sometimes by several months, due to lack of funds, incorrect computation of compensation due or procedural delays.
 
For the financial year 2018-19, the central government’s fund allocation for MGNREGS increased 14.5% over the previous year to Rs 55,000 crore, the highest ever. Yet, the percentage of wages unpaid was 57% in April 2018.
 

 
At the beginning of April 2018, as many as 99% of total fund transfer orders (FTOs) were delayed. By the end of the month, however, the authorities had cranked up the payment system to ensure a 42-percentage-point drop in unpaid wages to 57%, after the central government released funds on April 10, 2018, NREGA Sangharsh Morcha, an association of MGNREGS activists, told IndiaSpend.
 
Nevertheless, the preponderant majority of wages, 57%, remained unpaid.
 
Although the government claimed in an October 2017 statement that 85% of wages due to MGNREGS workers for the year 2017-18 until September 15, 2017, were paid on time, an independent study has shown this is not true.
 
Conducted across 10 states from April to September 2017, the study found that only 32% of payments were made on time.
 
MGNREGS wage payment delays have been a long-standing issue–19 state governments had stopped payments in October 2017 primarily due to lack of funds, which in some cases was because states’ audited reports of financial statements had not reached the central government in time to receive funds, IndiaSpend had reported in November 2017.
 
Nearly 85% of the central government’s allocation of Rs 48,000 crore had already been spent when the article was written, leaving wages amounting to Rs 3,066 crore unpaid at that time.
 
As of April 12, 2018, these 19 states’ status, as per data from the scheme’s website, is as follows:
 

• In West Bengal, where payments had been frozen since September 2017, 100% FTOs were pending since November 2017.
• Eight states had 100% FTOs pending since February 2018.
• Assam and Kerala had FTOs pending since January 2018.
• Six states had FTOs pending since March 2018. Meghalaya, Mizoram and Sikkim, three states whose data were unavailable previously, also had FTOs pending since March 2018.
• Of the 19 states, Maharashtra and Madhya Pradesh had fewer delayed payments.

 
Flawed definition of delay
 
Under the scheme’s provisions, workers should receive wage payments within 15 days of the ‘muster roll’ (attendance register) being closed, that is, after their work is done. If not, they are entitled to compensation at a fixed rate of 0.05% of the unpaid wages per day from the 16th day of the muster roll being closed, for the entire duration of delay.
 
The procedure followed to calculate wage payments is explained in this November 2017 IndiaSpend article. Ideally, workers should be compensated for delays until the day wages are credited into their accounts.
 
However, the Management Information System(MIS) of MGNREGS, responsible for maintaining records on muster rolls, wages and material payments, only considers delays until the day the FTO is generated at the block/panchayat level (provided it has been generated 15 days after the closing of muster rolls) and sent to the central government. Any delay thereafter by the central government in crediting payments is not considered. As a result, workers do not get the entire compensation they deserve.
 
To understand the magnitude of this flawed definition, the Azim Premji University study is instructive.
 
Key findings
 
The study was conducted in the states of Uttar Pradesh, Chhattisgarh, Madhya Pradesh, Jharkhand, Rajasthan, Bihar, Karnataka, Kerala, Orissa and West Bengal, for the period April to September 2017, covering 4.5 million accounts.
 
Overall, 78% payments were not made on time in these 10 states, while as many as 45% payments did not include compensation for delayed payment because FTOs were generated within 15 days.

 
The biggest difference between government claims and wages actually paid on time is in Chhattisgarh–the government claimed 94% wages were paid on time, when in fact 28% were. In West Bengal, the claim was for 87% timely payments but actually only 17% payments were made on time.
 
In five of the states, more than 50% of payments did not include compensation for delayed payment.
 
When workers do not get their payments on time, they usually resort to borrowing money, and sometimes even food.
 
“It’s been two months, we haven’t been able to afford milk by ourselves,” Sukhrani, 50, told IndiaSpend. She said the scheme owes her Rs 6,000, and she stopped working some four months back. “We scrounge and borrow to feed ourselves. We don’t even have slippers. You have to take loans to afford things. I’ve borrowed Rs 150 myself.”
 
The central government is supposed to clear payments within 24 hours of receiving FTOs. However, the study found, when FTOs were generated within 15 days, it took up to 25 days on average to credit the wage payment–from the central government to the states, and the states to workers. This amounted to as many as 53 days in West Bengal, or as few as 10 days in Madhya Pradesh.
 
Not all of the actual compensation due is paid, as the following table shows.
 

Source: Analysis of Payment Delays and Delay Compensation in NREGA Findings across Ten States for Financial Year 2017-18
 
The study calculated the compensation for delay until the day payments were deposited into workers’ accounts.
 
These estimates show that MIS missed as much as 86% of the compensation truly due. In Kerala, 98% of the compensation due was not calculated. In West Bengal and Chhattisgarh, more than 90% of the compensation due was missed.
 
Overall, the study estimated that Rs 7.52 crore should have been paid as compensation during April-September 2017, but actually only Rs 1.03 crore (14%) was paid.
 
In response to the above study, the rural development ministry said on April 4, 2018, that it had improved timeliness of wage payments so that wages paid on time had increased from 17% in 2016-17 to 43% in 2017-18, implicitly admitting that a majority (57%) of wage payments due were delayed in 2017-18.
 
Lack of funds, new system, compulsory Aadhaar linkage causing delays
 
Ram Naresh, 38, a resident of Banda district in central Uttar Pradesh, started working under MGNREGS 11 years ago, when the programme began. However, he has had no work under MGNREGS since May 2016.
 
Over a year, he either gets work for a month or 15 days, he told IndiaSpend, as against the 100 days promised. He supplements his unstable wages with other daily-wage work, sometimes traveling as far as 6 km for work. While he waits for his MGNREGS payments, he has to borrow to feed his four children.
 
“I haven’t worked for MNREGA since 2016,” Naresh told IndiaSpend. “Not because I don’t want to but because there isn’t any work. They are yet to pay me my remaining amount from last year. Why should I work if I don’t get the money?”
 
“A primary reason for delayed wage payments is lack of funds,” Rajendran Narayanan, co-author of the above study, told IndiaSpend. “In the first week of December 2017, out of the allocated budget of Rs 48,000 crore for the financial year 2017-18, around Rs 45,000 crore was already exhausted.”
 
Some Rs 14,000 crore of the budget allocated for MGNREGS in 2017-18 was actually funds that the government fell short of the previous year, thus adding them to the 2017-18 budget, Narayanan said.
 
Inadequate funding has driven daily MGNREGS wages lower than the minimum agricultural wage in 28 of India’s 36 states and union territories. The difference is as much as Rs 104 (roughly a third) in Gujarat, where agricultural wages are Rs 298 and MGNREGS wages Rs 194 during the current fiscal year, according to this April 2018 article in The Indian Express.
 
MGNREGS wages are revised every year as per a consumer price index for agricultural labourers (CPI-AL), which reflects a 35-year-old consumption pattern. As a result, in 10 states, MGNREGS wages have not been revised upwards since 2017-18.  
 
In a few states such as Maharashtra and Madhya Pradesh, where MGNREGS wages are higher than the state’s minimum wage, MGNREGS wages have increased by Rs 2.
 
In August 2017, the department of expenditure of the finance ministry released a memorandum stating that the reasons for delay included infrastructure bottlenecks, lack of funds and lack of administrative compliance.
 
Yet, in March 2018, the rural development ministry told the Rajya Sabha (upper house of parliament) that delays in wage payments were due to implementation issues at the state level. These issues included inadequate staffing, non-timely recording and reporting of attendance, data entry, generation of wage lists and FTOs, and so on.
 
The compulsory linkage of Aadhaar, the 12-digit unique identity number, to the bank accounts of MGNREGS workers has also created problems. If Aadhaar numbers are linked with incorrect bank accounts, wage payments can get credited incorrectly.
 
Experts say all of these reasons act together to delay payments.
 
Another reason for delayed payments is states’ failure to send audited reports of their accounts on time to the central government, Ankita Aggarwal of NREGA Sangharsh Morcha told IndiaSpend in January 2018.
 
Yet another possible culprit is the National Electronic Fund Management System (Ne-FMS), the central government’s payment system introduced at the beginning of 2016-17, which gives the central government the sole authority to make wage payments using the Direct Benefit Transfer (DBT) system. Funds go from the central government to a state’s Employment Guarantee Fund, and then to a worker’s account.
 
Before Ne-FMS, states could use their own funds to make payments during delays and seek reimbursement from the Centre later, Aggarwal said, but not any more.
 
In the study quoted above, six of the 10 states were under the Ne-FMS system when the study began, and these performed no better or worse than those using the previous system. “In our analysis on delayed payments, there wasn’t any significant improvement seen in crediting wages on time to labourers [through Ne-FMS],” Narayanan said.
 
“Though it is possible that more FTOs are being generated within 15 days, crediting the amount still takes a long time,” Narayanan said, “The excessive centralisation of payments under Ne-FMS has meant that the baton of accountability is being constantly passed around by the field functionaries of [MGNREGS]. One will often hear field functionaries of NREGA say that they have generated the FTO, but the Centre has not released payments.”
 
While various agencies pass the buck around, workers such as Gulaab Rani, 65, are disillusioned. “The money gets transferred to the bank. But if it doesn’t even reach the bank, then where are we expected to get it from?” she said, adding, “If they aren’t going to pay me, what’s the point of working at all?”
 
 
This is the second of a three-part series on the successes and failures of the Mahatma Gandhi National Rural Employment Guarantee Scheme. You can read the first part here.
 
Next: More Than 90% MGNREGS Workers In Kerala Are Women, And It Has Changed Their Lives
 
(This story has been produced in partnership with Khabar Lahariya, the country’s only indie, rural media platform, working out of Bundelkhand in Uttar Pradesh and Madhya Pradesh, with an all-women reporters’ network. Nair is a graduate in Economics and Statistics from the University of Mumbai.)

Courtesy: India Spend
 

The post Despite ‘Record’ Allocation, 57% MGNREGS Wages Due Remained Unpaid In April 2018 appeared first on SabrangIndia.

Though Sainath cites many examples of banks actually helping the poor and downtrodden during those hard times, the general story in Rural India was of despair, devastation and starvation.

Courtesy: Newsclick.in

The post How Demonetization Ravaged Rural Economy: P Sainath appeared first on SabrangIndia.

A  survey by citizens, carried out in January-February 2017, released recently, has revealed that only 24.3 percent of the respondents said that they were able to exchange their banned Rs 500 notes “for the same amount”, while 75 percent reported that “an old Rs 500 note was sold for Rs 400 or less in valid currency.” 

Survey

Carried out by Act Now for Harmony and Democracy (ANHAD) in alliance with 32 people’s organizations spread out in 21 Indian states, and involving 3,647 respondents, the survey, seeking to ascertain the behaviour of the people during the demonetization or noteban period, November-December 2016, further pointed out that of those who said that they received Rs 400 or less amount for Rs 500 note, 51.3 percent reported it was exchanged for Rs 400, 12 reported they exchanged it for Rs 300, and 3.3 percent reported that the Rs 500 note was exchanged for as low as Rs 200.

Among the respondents, about 25 percent of respondents were students, 13.7 percent unemployed, 18 percent employed in private sector, 10 percent working as ‘labour’, 4.9 percent reported household work as their profession, 3.4 were in government job and 4.4 percent were involved in agriculture. 

The percentage of those who reported ‘Hindu’ was 65.0 and ‘Muslims’ were about 27.0 percent – constituting together about 92 percent. There were about 3 percent of Christians and about 2 percent were Sikh. About 3 percent said that they do not follow any religion or said humanity is their religion. 
Caste-wise distribution showed that about 37 percent belonged to the general category, 29 percent were SC/ST and 30.7 percent belonged to OBC. Then, 80 percent said they had access to television, 29 percent listened to radio, 50 percent read newspapers, and so on. 

The report, which has been published in a new book, “Demonetization: Exorcising the ‘Demon’”, released to mark one year of the surprise Modi government announcement to withdraw from circulation Rs 500 and Rs 1,000 notes, said, “Region-wise distribution showed that this form of corruption was rampant in all the regions.”
 

Pointing out that the “industry to exchange old notes cropped up overnight across the country”, the report said, “The fate of the banned Rs 1,000 note was not very different”, adding, though, that here “the percentage of those who said that they exchanged their Rs 1,000 note for the same amount without any reduction was reduced to 17.4 percent.” 
 

The report said, “More than 82 percent of the respondents reported that in their locality, a Rs 1,000 note was sold for less than Rs 900”, adding, 40.7 percent respondents “reported that the note was sold for Rs 800” .
 

Then, “those who said they exchanged their note for Rs 700 were 9.2 percent, those who reported Rs 600 was the price of a Rs 1000 note were 4 percent, and 4.8 percent said that an old Rs 1,000 note was sold at as low as Rs 500.” 

The report noted, “Region-wise distribution showed that more than 90 percent respondents witnessed reduction of cost of Rs 1,000 note in Central (98%) and Northern (91.4%) regions”, adding, astonishingly, “10.4 percent of the respondents said that in their locality a Rs 1,000 note was sold for as low as Rs 100.” 

The report commented, “It is quite evident that the claim made by the Prime Minister that the objective of demonetization was to clean Indian economy of black money was hollow. Instead, a new channel for generating black money opened up.” 
 

It added, “It can be concluded that a very large amount of legitimately earned money by the poor citizens was converted into black money. With one stroke the people’s toil and labour was devalued.”

The post Noteban Encouraged Huge Corruption: Survey appeared first on SabrangIndia.

Image: Indian Express

In an exclusive interview to Sabrangindia, P Krishnaprasad, Finance Secretary of All India KisanSabha, tells us how India’s farming community continues to suffer even today.
 
“The BJP came to power on the back of campaign slogans about the economic inadequacies of common people. But their subsequent policies have failed to reflect that commitment,” says P Krishnaprasad. He speaks of the series of protests and agitation by farmers in Maharashtra, Madhya Pradesh and Rajasthan and says that this is a reflection of their growing discontent with the present government. “Even simple things like implementation of the recommendations of the Swaminathan Commission Report like paying farmers 50% above the minimum support price have not be done yet,” he says explaining why big and small farmers across India are frustrated. “Take the case of Mansaur where farmers who used to sell white onions for Rs 120 a kg are now forced to sell it for throwaway prices like Rs 10 to Rs 15 per kg! Why wouldn’t they be upset,” he asks.

He is also critical of the failed demonetisation experiment which according to him broke the backbone of the rural economy by wiping away currency.

“Without cash agricultural trade came to a standstill, forcing them to sell at a loss ranging from at least 20 to as much as 60 percent. This trend of distress sale continued for as long as four to five months after demonetisation,” says Krishnaprasad. He is also critical of the forced digitization of money which he says is not viable in rural India. “First, many of the Jan Dhan accounts were just on paper. Then, the banks were in towns that were 15 to 20 kilometers away from the villages, making it difficult for farmers to operate on a day to day basis,” he says, adding “Ground realities in rural India are very different from Delhi and Mumbai. We don’t have an ATM at every street corner!”

Krishnaprasad also feels GST played a huge role in pushing the agricultural economy further down a spiral. “All agricultural produce needs to be transported from the fields to the markets, from rural to semi-urban and urban areas. GST adversely affected the transportation industry and therefore impacted the agricultural sector too,” he explains. “What’s worse is that the Modi government has failed to bring down fuel prices, thus worsening the economics of transporting agricultural produce,” he says.

Krishnaprasad is also critical of other government policies related to agriculture such as the new land acquisition law which he feels completely ignores the best interest of farmers. He also finds FDI in agriculture problematic as he feels it can be misused to perpetuate the monopoly and dominance of corporations over farmers. “Even initiatives like digital platforms to help traders find agricultural produce at cheap rates were originally meant to streamline the process by eliminating middlemen, ended up hurting the petty traders while large traders made huge profits. For example, they would purchase dal at Rs 20 a kg and sell it for Rs 180 per kg,” he says.

“The disillusionment is showing. There has been a 42 per cent increase in farmer suicides,” he claims. “Farmers are pushed further and further into debt, the insurance schemes are not managed properly either. Out of a premium of Rs 21,500 crores, only Rs 6,300 crores has been disbursed,” he claims. “Then there is the ridiculous ban on cattle trade. Farmers love their cattle and it’s not like all cattle owners and traders are from the minority community,” he says. “Farmers only sell cattle in emergencies and when they have no other alternative. On one hand you cripple cash supply, on the other you prevent them from getting money by selling cattle,” he laments.

Krishnaprasad says farmers today have three basic demands. “We want remunerative price for all crops. We want the implementation of the recommendations of the Swaminathan Commission. Finally, we want freedom from indebtedness,” he signs off.
 
 

The post Modi Govt’s Demonetisation & GST Moves Destroyed India’s Rural Economy: Krishna Prasad appeared first on SabrangIndia.