Sense and Solidarity: Jholawala Economics for Everyone by Jean Drèze

Author:Jean Drèze
Language: eng
Format: azw3, epub
Tags: Sense and Solidarity
Published: 2019-02-20T18:30:00+00:00

* January 2008.

Employment Guarantee or Slave Labour?*

Reports of long delays in NREGA wage payments have been pouring in from all over the country in recent months. The reports are truly alarming, with delays of several months becoming the norm in entire districts and even states. Worse, there are worksites where labourers have lost hope of being paid at all (we found some in Khunti district, Jharkhand). This is not very different from slave labour.

Under the National Rural Employment Guarantee Act (NREGA), workers must be paid within fifteen days. Failing that, they are entitled to compensation based on the norms of the Payment of Wages Act – up to Rs 3000 per aggrieved worker. However, except for one isolated instance in Jharkhand, compensation has never been paid.

Even small delays often cause enormous hardship for workers who live on the margins of subsistence. How are they supposed to feed their families as they wait day after day for their wages, clueless as to how long it will take and powerless to do anything about it? A recent investigation of hunger deaths in Baran district, Rajasthan, found that delays in NREGA wage payments were partly responsible for these tragedies. Timely payment is, literally, a matter of life and death – all the more so in a drought year.

It is often argued, especially by government officials, that the main reason for the delays is the inability of banks and post offices to handle mass payments of NREGA wages. There is a grain of truth in this, but as a diagnosis of the problem, it is quite misleading. First, the current jam in the banking system is the central government’s own doing. It reflects the hasty and top-down manner in which the switch to bank payments was imposed about a year ago. As early as October 2007, members of the Central Employment Guarantee Council had warned against this, and advocated a gradual transition, starting with villages that are relatively close to the nearest bank.

Second, the delays in banks and post offices are by no means immutable. In fact, the main obstacle (opening millions of accounts in a short time) is already behind us. In a few states, like Rajasthan, the volume of NREGA payments is certainly a continuing challenge. But in most states, NREGA payments would be quite manageable with suitable arrangements on the part of banks and post offices. In Khunti district, we found that bank payments were easy to expedite, with a little help from trained volunteers who accompanied workers to the banks. In Andhra Pradesh, there is a clear protocol for wage payments through post offices, with strict timelines and constant monitoring. According to this monitoring system, I am told, 70 per cent of the wages are paid within fifteen days.

Thirdly, the delays are not confined to the banking system. Very often, it takes more than fifteen days for “payment orders” to be issued to the banks by the implementing agencies (e.g. the gram panchayat). Thus, there are lapses outside the banking system too.

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