New Delhi: A large percentage of workers who get employed under the Mahatma Gandhi National Rural Employment Guarantee Act (NREGA) face huge problems in accessing their payments. Not only do they often have to travel large distances and wait many hours to get their wages, a report has revealed.
Prepared by LibTech India, a group of social scientists, activists, engineers and data scientists who have been working on various aspects of NREGA, the report – titled ‘Length of the Last Mile: Delays and Hurdles in NREGA Wage Payments’ – was prepared on the basis of a survey of 1,947 workers in Jharkhand, Andhra Pradesh and Rajasthan.
It has revealed that often, workers spend more than a third of their weekly NREGA wages in just withdrawing them. It has also revealed that almost half of the workers (45%) had to visit banks multiple times to make a withdrawal.
Took many workers up to four hours to access wages
The report also pointed to the failings of the Customer Service Points (CSPs) and Business Correspondents (BCs) system in streamlining the system. It said an estimated 40% of CSP/BC users were forced to make multiple trips due to biometric failures. Also, it said, 57% of the respondents complained that their passbooks were not updated regularly by the disbursement agencies. Many of the workers also complained that they had to spend up to four hours to access their wages from banks.
Noted food rights activist Jean Dreze, who wrote the foreword to the report, said, “Delays in wage payments are one of the most pressing issues faced by workers.”
The report said though “various governments have paid much attention in the last decade on the technological aspects of the digital payments architecture through the paradigm of Direct Benefits Transfer (DBT)” through which government directly transfers money to workers’ bank accounts, scant attention has been paid to the “systematic evaluations of the challenges faced by workers once their wages are credited to their bank/ postal accounts”.
Actual time taken on average for to-and-fro travel to wage disbursal agency. Photo: LibTech
Banks remain the preferred mode of accessing wages
Referring to these as ‘last mile challenges’, the report said most of the workers – 1182 or 60.7% – relied on banks to get access to their wages, while 476 workers (24.4%) utilised the services of CSPs or BCs, and the rest transacted through post offices.
Stating that the bank branch remained the “primary disbursement agency” for most workers, the report added that however, “post office users seemed to be most satisfied with the quality of services”. As for the CSP/BCs, it said, they “seem to be a convenient alternative to transacting at the bank” but in practice, the interoperability or choice of where to transact remained highly limited and was rarely exercised.
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Workers have to travel long distances to access money
The report pointed out that in 2013, the Committee on Comprehensive Financial Services for Small Businesses and Low Income Households had expressed the hope that “by January 1, 2016, the number and distribution of electronic payment access points would be such that every single resident would be within a fifteen minute walking distance from such a point anywhere in the country.” However, it said, four years on, its survey revealed that most workers had to travel several kilometres to access their money.
Also, it said, awareness about banking norms and rights was low with nearly 75% of respondents saying they did not know if they could transact in any bank branch. Further, workers do not have reliable information on wage credit. Around 36% needed to visit the bank to find out about wage credit and about a quarter of them were misinformed about it and so had to make multiple visits to find out if their money had come.
The report said the workers sometimes also had little clue regarding where their wages have been credited. Many of them faced difficulty in linking their Aadhaar to the bank account and even when they managed to do so, they were unable to keep track of the transactions in their account. “While all the bank and post office users were issued a physical passbook, about 56% of all those who opened accounts at CSPs/BCs were not issued passbooks. 57% of the respondents reported that their passbooks do not always get updated.”
Workers spent a lot of time, money on accessing wages
The survey revealed that often the workers had to make multiple trips to banks to withdraw their wages. “There were many instances when workers told us that they were sent back empty handed from the disbursement agency. For them, it was not guaranteed that they would be able to access their own money when they set out from home,” the report said.
It said overall, 45.1% of workers had to make multiple visits to the bank for one withdrawal and this percentage was highest at 54.2% in Andhra Pradesh, followed by 43% in Jharkhand and 38.8% in Jharkhand. Likewise, around 40% of all workers claimed that they had to make multiple visits to CSP/BC due to biometric failure; 55.3% said they had to visit the ATM multiple times due to insufficient cash and 52.3% said they had to make multiple visits to their post office for withdrawals.
The average cost incurred in visiting a post office to withdraw wages was the lowest at Rs 6, in comparison to Rs 31 spent on visiting a bank, Rs 11 for a CSP/BC and Rs 67 to go to an ATM. The report called for promoting the use of post offices for disbursing NREGA wages to reduce the cost of withdrawal for workers.
Nearly half the NREGA workers had to make multiple visits to the bank for one withdrawal. Photo: Reuters/Krishnendu Halder/Files
Rejected payments add to workers’ loss
In terms of time too, the report said, the loss is usually significant. “In general, for NREGA workers, a visit to the disbursement agency implies that they don’t get to complete a day’s work that day. This, in turn, means that they don’t get their full daily wages on the days that they visit the disbursement agency.”
The survey pointed out that in many cases, the workers reported payments or DBT cash transfer getting rejected due to technical reasons. It said the workers do not get the wages unless the rejected payments are rectified. “According to official figures, as of July 2020, in the last five years, about Rs 4,800 crore worth of payments were rejected and about Rs.1,274 crore worth is still pending to be paid to workers.” Also, it added that 77% of the people whose payments were rejected, had no idea why it was so.
Grievance redressal remains the weakest link
The report highlighted that even obvious violations of NREGA have been ‘normalised’ and are not considered as legitimate grievances by workers. Overall, it said, about 28% of the respondents had communicated their complaints but of these, 94% did so only verbally. It said nearly 79% of the workers said their grievances pertained to pending wages or receipt of partial wages.
In light of these findings, LibTech India has also made some suggestions. It has called for providing multiple payment alternatives to the workers and for phasing out the least preferred.
The group had also suggested that a Know Your Rights (KYR) framework be prominently displayed at every payment disbursement agency; passbook update facilities should be made available at every payment disbursement agency, including CSPs and BCs; and a social audit be conducted of all intermediaries in the disbursement of wage payments including agencies such as Unique Identity Authority, National Payments Corporation of India, Public Financial Management System and all the banks, and CSPs/BCs.