Holes in the safety net

The Indian Express     24th July 2021     Save    
QEP Pocket Notes

Context: Persistent delays in MGNREGA payments are worsening pandemic precarity.

Significance of MGNREGA:

  • Acted as a shock absorber during the first wave of the pandemic: Its functioning hinges on sufficient budget allocation, reliable payment systems, and ease of access to wages.

Challenges faced by MGNREGA:

  • Reduced funding: Government of India (GoI) not only reduced the MGNREGA budget this year but also neglected it in subsequent relief measures post the second wave.
  • Delayed work: As per official data, only 26% of the transactions of the first quarter of this financial year were credited within the stipulated seven-day period by the GoI.
  • The GoI took 26 days on average to process the transactions in the second stage.
  •  In a previously conducted study across ten states, we found that Stage 2 alone was taking more than 50 days.
  • These delays were completely unaccounted for as they were not reflected in the MGNREGA MIS.
  • India boasted 4,355 crore digital retail transactions in 2020- 21 as per RBI data. These are usually completed within a day, if not in a few minutes. In comparison, MGNREGA transactions, which are only 1.6 per cent in the volume of these, get routinely delayed.


Lack of feedback: The digital payments system of MGNREGA has been a laboratory of many experiments since 2012. However, no mechanism to solicit feedback from workers to evaluate the robustness of these systems has ever been created.
QEP Pocket Notes