Analysis of Payment Delays and Delay Compensation in MGNREGA

Rajendran Narayanan, Azim Premji University
Sakina Dhorajiwala, LibTech India
Rajesh Golani, Libtech India

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The Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) provides a minimum of 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 great feather in the cap of
transparency. An essential safeguard in MGNREGA is delay compensation to be paid, as penalty, when workers don’t receive wages within 15 days of completion of work. Despite several progressive measures, payment delays are rampant and the method of delay compensation is flawed leading to massive under-calculation of the true payable compensation. By analysing over 9 million transactions for the financial year 2016-17 across 10 states, we observe that only 21% of the payments were made on time. In 47% of the records analysed, only partial delay compensation is being captured and the remaining 32% of the records are not even being considered as delays in the NREGA MIS. These are due to the flawed method of calculating delay compensation. On aggregate, in our sample, while the true total compensation payable is about Rs 36 crore, only about Rs 15.6 crore is being calculated in the MIS.

Suggested Citation:

Narayanan,Rajendran Sakina Dhorajiwala, and Rajesh Golani .2018. “Analysis of Payment Delays and Delay Compensation in MGNREGA.” Centre for Sustainable Employment Working Paper#5, Azim Premji University, Bangalore.