The Comptroller and Auditor General’s report on Maharashtra’s employment guarantee scheme says work is badly planned, financial management is poor and there is virtually no monitoring of the scheme

Close on the heels of a report by the Comptroller and Auditor General (CAG) of India pointing out several procedural and financial irregularities in implementation of the National Rural Employment Guarantee Scheme (NREGS) comes a CAG report pointing to failures in Maharashtra’s employment guarantee scheme (EGS).

Maharashtra’s EGS, started more than 20 years ago as a drought relief measure and to check rural migration, has been indicted for falling short on several fronts: planning, financial management, registration of labourers, selection and execution of works, payment of wages, and monitoring.

The 2006-07 CAG report says the scheme has not met its objective of poverty alleviation. People in ‘C’ class municipalities have been left out and budgets prepared for the scheme have not been based on demand. Moreover, registration of labourers is incomplete, works have been lying unfinished for years, and payment to labourers is pending or has not been in accordance with the Minimum Wages Act. Monitoring was deficient as committees that had to be set up for this purpose do not exist.

The CAG pointed out that district collectors did not prepare manpower budgets to assess employment needs. This resulted in unrealistic plans which, in turn, resulted in annual expenditure being just 19% of the funds that these plans demanded.

Although an amount of Rs10,818.44 crore has been collected under the employment guarantee fund (EGF) (which funds the scheme through professional tax and other taxes collected from citizens), only Rs 4,677.24 crore was spent on the EGS in the year under review.

Around 38 implementing agencies delayed payment of wages to labourers, in some cases for up to 13 months. Works were not properly inspected, nor were internal audits carried out.

The CAG report also accuses the government of “diverting EGF money for other purposes”. Budgetary provisions have been consistently low and are not keeping pace with increasing receipts over the years, the audit notes. At the end of March 2007 there was a balance of Rs 11,569.10 crore in the EGF. This means that the taxpayer is shouldering the financial burden without it serving its intended purpose.

In September 2005, the collector of Solapur unearthed a massive scam in the EGS involving local officials, which the latter tried very hard to cover up. The expose apparently has not served to better the EGS’s performance.

The central scheme’s performance too has come under the scanner. On May 15, 2008, the Supreme Court sought a response from the Centre and all the states on a petition seeking proper and effective implementation of the NREGS. A bench headed by Chief Justice K G Balakrishnan issued notices to the Ministry of Rural Development and state governments on a petition filed by the NGO, Centre for Environment and Food Security (CEFS), seeking proper utilisation of funds allocated under the NREG Act.

CEFS alleged that the Rs 22,000 crore project, which was implemented in September 2005 with a view to providing 100 days of guaranteed employment to at least one member of each rural household, suffers from large-scale corruption and mismanagement.

Source: DNA, May 21, 2008
             PTI, May 15, 2008