Published: August 23, 2014
Photo: The HinduFIGHTING FRAUD: Surveys point to a sharp reduction in the extent of embezzlement of NREGA funds in recent years, at least in the wage component of the programme. Picture shows NREGA workers Kancheepuram district, Tamil Nadu.
Corruption in NREGA works has steadily declined in recent years. There are important lessons here that need to be extended to other domains
One neglected aspect of the debate on the National Rural Employment Guarantee Act (NREGA) relates to the process aspects of the programme. In the process of planning works, organising employment, paying wages or fighting corruption, many valuable activities take place: Gram Sabhas are held, workers agitate for their rights, social audits are conducted, technical assistants are trained, administrators find out how to speed up wage payments, and so on. These activities, aside from being valuable in themselves, are also a great opportunity to learn.Prevention of corruption
One productive area of learning has been the prevention of corruption. The principal method of embezzlement in labour-intensive public works programmes is well known: muster rolls are inflated and middlemen pocket the difference. Before the Right to Information Act (RTI) came into force, muster rolls were beyond public scrutiny and the crooks had a field day. Things improved after muster rolls were placed in the public domain, and even displayed page by page on the internet. Even then, an enterprising middleman might fudge the muster rolls and hope that no one will bother to verify them. So, further safeguards were introduced one by one including mandatory social audits of all NREGA works.
A major breakthrough was the transition to bank (or post office) payments of NREGA wages. This was a painful affair — the system was not ready for it and the overload led to long delays in payments. Five years later, banks and (especially) post offices are still not equal to the task. For the prevention of corruption, however, this was a step forward: the new system makes it much harder to embezzle NREGA funds since the money now goes directly to workers’ accounts.
One major qualification is that village post offices are still vulnerable to capture by powerful middlemen. Extracting money from someone else’s bank account without his or her knowledge is very difficult because banks have strict norms of identity verification. But for a suitable commission, a village postmaster can often be persuaded to use the accounts of illiterate workers as a conduit to siphon off NREGA money. Over time, workers learn to collect their wages in person from the post office and verify the passbook entries. But it will take a while for many of them to protect their account from fraud. And the crook’s next refuge is to involve workers themselves in the scam.