Govt to pay MGNREGA wages through workers’ bank accounts

The union cabinet on Wednesday approved direct payment of wages to workers engaged under the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) by remitting the amounts into their bank accounts.

A cabinet meeting chaired by Prime Minister Narendra Modi approved the scheme for better implementation of the MNREGA and to empower state governments.

Under the scheme, the wage component of MGNREGA will be released from the State Employment Guarantee Fund window directly to the worker's accounts based on a fund transfer order generated by state implementing agencies as per procedures prescribed by the rural development ministry.

The government plans to further streamline the system and to empower state governments or grass-root implementation agencies to deliver entitlements as per the objectives of the Act.

The scheme would benefit all stakeholders and improve overall efficiency of implementation while assuring timely payment of wages to workers as payment would be made on the second day the pay order is generated, sources said.

The scheme will also ensure greater transparency in movement of funds and less corruption in MNREGA.

Also, state governments will get more time to plan and improve the process efficiency, while the central government would gain by releasing only funds actually expendable.

The gram panchayats would also be empowered to take up work according to the agreed labour budget, without struggling for release of funds.

Implementation of the electronic fund management system (e-FMS) has been tardy as payments continued to be delayed due to delays in release of funds by central government, multi-level release system, continued parking of funds at various levels and inability of implementation agencies to get funds in time for payment.

This, they added, called for further steps to improve the system to assure timely availability of funds as per demand.