Just 3% of MNREGA job seekers received unemployment allowance, shows central panel report

Department of Rural Development replies will look into the issue, state government’s responsibility to pay interest accrued on unpaid allowances

By Raju Sajwan
Published: Tuesday 13 February 2024
The MNREGA Act also states that if wages are not paid within fifteen days of the closure of the muster roll, the worker is entitled to compensation. File photo: CSE

If a labourer does not find work within 15 days of looking for work, he is entitled to unemployment allowance under the Mahatma Gandhi National Employment Guarantee Act (MGNREGA). However, statistics show that in the last five years, 7,124 workers were found to be eligible for unemployment allowance, but only 258 received them. That means that only about 3 per cent of the workers received unemployment allowance in the last five years. 

The figures were revealed in a report by the Parliamentary Standing Committee on Rural Development and Panchayati Raj. On February 8, 2024, the Ministry of Rural Development (Department of Rural Development) tabled its 37th report on “Rural Employment through MGNREGA — An Insight on Wage Rates and Other Matters Related Thereto” in the House. 

According to Section 7(1) of MGNREGA, 2005, “If a person applying for employment under the scheme is not employed within fifteen days, he shall be entitled to a daily unemployment allowance,” the report stated. This allowance shall be one-fourth of the wage rate for the first 30 days of the financial year and half of the wage rate for the remainder.

According to paragraph 6 of the Act’s Section 7, the state government can determine the procedure for payment of unemployment allowance. State governments may also make necessary budgetary provisions for the payment of unemployment allowances.

The Standing Committee’s report provides state / Union territory-specific information on beneficiaries eligible for unemployment allowance and beneficiaries who received unemployment allowance under MGNREGA for the last five fiscal years — 2018-19 to the current fiscal year 2023-24 (up to November 21, 2023).

Karnataka had the highest number of workers eligible for unemployment allowance in the last five years, the figures showed. While 2,467 workers were found to be eligible for unemployment allowance, not a single one received them, the report showed. 

Rajasthan ranked second, with 1,831 workers eligible for unemployment allowance over a five-year period. However, just nine received it. 

No state promptly distributed unemployment allowance. In terms of large states, 773 workers in Bihar were found to be eligible for unemployment allowance, but none received them. Similarly, none of the 389 eligible in West Bengal or 139 in Jharkhand received an allowance. In Uttar Pradesh, 173 out of 598 workers were granted unemployment allowance.  

As state governments are responsible for providing unemployment allowance based on their economic capacity, they must make the necessary budgetary provisions for it, the panel report said. 

The report stated that it was necessary to provide unemployment allowance to those who are not given employment. The committee, therefore, recommended that the Central Rural Development Department ensure all possible measures in coordination with the states and UTs concerned. This ensures that state governments fulfil their statutory obligations to provide unemployment allowance to MGNREGA beneficiaries.

On the question of non-payment of unemployment allowance, the secretary of the Department of Rural Development (DoRD) told the Parliamentary committee the department will look into the issue of non-payment of unemployment allowance and compensation for delayed wages.

The MGNREGA also states that if wages are not paid within 15 days of the closure of the muster roll, the worker is entitled to compensation for delay at a rate of 0.05 per cent of the unpaid wages. If there is another delay after the sixteenth day of the closure of muster roll, this compensation must be paid daily. The panel asked the DoRD for information about this as well.

The committee was informed that from the financial year 2018-19 until November 21, 2024, a total of Rs 13,24,67,394 was sanctioned for compensation for late payment in all states, but only Rs 9,96,39,298 was paid. That means Rs 3,28,28,096 is still due. The DoRD secretary’s response also clarified the Centre’s stand — it is the responsibility of the state government to pay the interest, the panel was told. 

It is worth noting that MGNREGA is a demand-based wage employment scheme that provides at least 100 days of guaranteed wage employment to each family per fiscal year in order to improve the livelihood security of families in rural areas of the country. It provides livelihood security, which means that rural households have alternative sources of income when better employment opportunities are unavailable. 

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