Delays in Wage Payments are Reducing Demand for NREGA and may Call for Cash Payments in Some Areas

Jul 10, 2012

"Delays in wage payments are reducing demand for NREGA and may call for cash payments in some areas," said Jairam Ramesh, Minister of Rural Development at a day-long consultation organised by Ministry of Rural Development and UNDP.

"An increase in agricultural wage rates is the most powerful impact of the Mahatma Gandhi National Rural Employment Act (MGNREGA)", said Jairam Ramesh, Minister of Rural Development, Government of India. "However, delays in wage payments are reducing demand for NREGA and may call for cash payments in some areas to ensure that the rural poor are able to benefit from the true potential of the Act", he added.

The Minister was speaking at a day-long consultation organised by the Ministry of Rural Development and the United Nations Development Programme (UNDP) in New Delhi today.  The consultation aimed to strengthen the reform agenda of MGNREGA through hearing from a range of institutional and civil society partners to address implementation challenges and share solutions based on UNDP supported monitoring studies and innovation projects.

This consultation was well timed to contribute to the development of MGNREGA 2.0 which will be released shortly.

Looking beyond delayed wage payments, the Minister called on participants to examine  ways that MGNREGA can be leveraged to create durable assets that improve the productivity of small and marginal families. 

According to B.K. Sinha, Secretary, Rural Development, "Indian agriculture is in an evolutionary state and MGNREGA has the potential to usher in a second green revolution in India and correct social wrongs provided we have the wisdom to guide this revolutionary programme. "

The key challenge according to Mihir Shah, Member, Planning Commission was to trigger greater awareness amongst potential rural workers, especially among the SC/ST, that could drive demand for work, particularly at block level where deprivation is most intense across the country. "To facilitate the demand for work and strengthen gram panchayats, the Planning Commission working group has recommended increase in the number of technical resource persons that can support gram panchayats and help create a shelf of projects that can funded through MGNREGA," he added.

Speaking at the opening session of the consultation, Caitlin Wiesen, Country Director, UNDP said, "MGNREGA has immense potential to positively impact the climate resilience of the poor by protecting the natural resource base that is central to rural livelihoods and encouraging more responsive local governance that can respond to the needs and real demands of people most deprived and excluded from development."

Since 2006, UNDP has partnered with the Ministry of Rural Development to support transparent, accountable and equitable implementation of MGNREGA. Technical expertise and knowledge support has been provided for monitoring, MIS and data analysis at the national level. A Professional Institutional Network comprising a range of institutions helps in simultaneous monitoring of MGNREGA and providing feedback. Innovation pilots have focused on furthering financial inclusion, building skills, community based planning and the effective use of ICT to enable greater empowerment and transparency.

The MGNREGA Reform Agenda is an initiative by the Ministry of Rural Development to enable the Government to identify a core set of recommendations that can improve implementation of MGNREGA.  The Reform Agenda can be found online at:

Outlining recommendations to address delays in wage payments, Jean Dreze, well known development economist said that adopting a daily wage payment system could reduce delays compared to the piece rate system which involves a more complex system of measurement.

Summing up the consultation Patrice Coeur-Bizot, UN Resident Coordinator and UNDP Resident Representative said, “UNDP will focus on mobilizing communities and disseminating information on rights and entitlements amongst socially disadvantaged communities. Further, technical support to select states will support implementation and replication of models that demonstrate the potential for strengthening grassroots democracy and changing rural realities.

Minister Ramesh also felicitated India’s newest millionaire and brand ambassador of MGNREGA – Sushil Kumar, the recent winner of theKaun Banega Crorepati (India’s version of the reality show Who Wants to be a Millionaire). Since 2007, Sushil from Motihari in Bihar has been a data entry operator for MGNREGA. 

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Sumeeta Banerji
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Nandita Surendran

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