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Cabinet approved to release of wages of MNREGA workers into bank accounts

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In an effort to prevent the underlying corruption and mainly the delay in payments to workers under the rural employment guarantee scheme, the Union Cabinet chaired by Prime Minister Narendra Modi, has approved direct benefit transfer (DBT) to beneficiaries of the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA).

Under the scheme, the wage component of MGNREGA will be directly released following the State Employment Guarantee Fund window to the worker’s bank/post office account based on a fund transfer order to be generated by states’ implementing agencies in accordance with procedures prescribed by Rural Development Ministry. The National Rural Employment Guarantee Act requires workers to be paid within 15 days of closing the muster roll.

Recently awarded by the World Bank as the world’s largest public works programme, MGNREGA was facing criticism mainly due to lack of transparency and delayed payments to the workers. Now the direct benefit transfer ensures that scheme funds do not get indefinitely parked with the state finance departments anymore.

 Impacts

  • This will further streamline the flow of funds and empower state governments to deliver entitlements as per the objectives of the Act.
  • The new scheme is expected to ensure greater transparency in movement of funds and lesser levels of corruption in MNREGA.
  • The gram panchayats will also be empowered to take up work according to the agreed labour budget without struggling for release of funds.