MGNREGA: Pilferage continues as govts ignore vigilance processes

For 40-year-old Sivagami Vellayan of in Karumanthangudi village in Tamil Nadu’s Sivagangai district, working at the coconut husk crushing factory for six days a week was not enough. She earned ₹200 a day that was barely enough to meet her needs. To add to that, the job was seasonal and not available during winters and monsoon. While she cultivated paddy in her 1.5-acre land, her alternative was MGNREGA, which assured 100 days of work a year at ₹224 a day.

As per records, she had worked on a check-dam project in her village under the scheme for 44 days in 2018-19. However, a social audit, done under the MGNREGA scheme, revealed that she had been paid ₹1120 for five days of work in December 2018, though she did not actually work for the given period.

However, Sivagami told The Federal that the panchayat officials came to her, offered upfront payment if she gave her job card and returned the card after a week. The village authorities would then show that Sivagami worked on a specific project.

And once the payment was credited to her bank account — which is done as per the government’s direct benefit transfer (DBT) scheme to end corruption — the officials would come asking for the money back. She admitted that she returned the money twice, but later denied them the money as she was aware that they were siphoning money through her account.

The social audit found the anomalies and reported the case. It held panchayat secretary Ramanathan accountable. He, however, laid the blame on the project contractor and claimed that objections were raised at the village panchayat meetings.

Ramanathan, however, admitted that machines were used instead of manual labour in some other works, but with the permission of the villagers. That would still amount to process violation as the idea of the MGNREGA scheme is not just to create assets but generate guaranteed employment. Despite the audit and the report, no money was recovered from the accused.

In Karumanthangudi village in Sivagangai, which is one of the six districts that receive a backward regional grant to address the regional imbalance in development, panchayat officials had siphoned nearly ₹8 lakh in 2017–2020 period.

The village panchayat had accounted for fake works, made payments to ghost workers and used machines instead of generating labour under the scheme. The villagers (MGNREGA cardholders) had become privy to the corruption under forced circumstances.

Rampant corruption

This is just one instance. As per the management information system, Tamil Nadu accounted for one-third of the reported pilferages revealed under the social audit. As much as ₹7,860 crore worth of pilferages was reported in the last three years. Economists would opine that this amount could come in handy in the government’s plan to cut the fiscal deficit by ₹2 trillion, and maybe, fund the entire Social Justice and Empowerment Ministry, which has a budget of ₹7,800 crore and caters to the welfare of the backward classes and those with disabilities.

However, this is only the reported amount and comes from one-fifth of the audited village panchayats in the country. One can only imagine the huge amount the complete audit of the scheme can reveal.

Tamil Nadu tops the list because 95 per cent of the village panchayat accounts were audited whereas across the country, only 20 per cent audits have been done. Many states like Maharashtra, Rajasthan, Jammu and Kashmir and Telangana, Bihar and Goa, have not undertaken social audits at all.

As per the data, ₹738 crore is accounted as financial misappropriation, ₹6,185 crore as financial deviation and ₹939 crore under process violation. About 40 per cent of the pilferages were accounted in the election year.

Of the said amount, barely 0.3 per cent (₹2 crore) of the money has been recovered by the government. Of about nearly reported 12 lakh cases, barely about 6 per cent were resolved, and FIRs registered in only 71 cases. And in Tamil Nadu, not a single FIR was registered.

The BJP government and its rural development ministry, on the other hand, has claimed zero corruption under the scheme.

“There was a perception that MGNREGA means loot. We have put a stop to the loot through direct benefit transfer (DBT),” former minister of state for rural development Ram Kripal Yadav had said in Parliament.

But reality is far from it. Even with DBT, panchayats and workers have found a way to continue malpractices.

Cases of payments to ghost workers, payment of wages in excess of the prescribed amount, using machines instead of human labour, fake asset creation, poor quality material and output were commonly reported.

Union minister for rural development Narendra Singh Tomar and Tamil Nadu rural development minister SP Velumani could not be reached for comment.

Provision for social audit

The MGNREG Act provides for social audit and appointment of ombudspersons to check malpractices. But many states have failed to give powers to these bodies. And even when they are appointed, delay in salary disbursement and administrative difficulties hamper their functioning.

The states are mandated to appoint an ombudsperson for every district (maximum two per district) for receiving grievances and recommending actions accordingly.

Their functions include receiving complaints, ordering spot investigations, taking suo-motu cognisance for non-allocation of work and non-payment of wages beyond a stipulated time and recommending suitable action in case of lapses.

A state like Tamil Nadu which spent nearly ₹14,850 crore between 2017 and 2020 under the MGNREGA scheme, does not have a single ombudsperson for the last six years.

At the all-India level, of the 619 districts in which the scheme is operational, only 141 of them (23 per cent) have ombudspersons. This is in spite of the government easing recruitment norms in 2017.

Currently, besides Chhattisgarh, Karnataka, Nagaland, Rajasthan, and Uttarakhand, no other states have more than 50 per cent of the required ombudspersons. In fact, 19 states and Union territories, including Gujarat, Uttar Pradesh, Haryana, Tamil Nadu, Kerala, West Bengal, don’t have even a single ombudsperson, according to the data obtained from MNREGA MIS.

The Centre which bears the social audit cost reduced the expenditure on social audit under the scheme recently. The Act had prescribed that 1 per cent of the MGNREGA total expenditure could be spent on social audit, but in 2016-17, the same was reduced to 0.5 per cent.

Flaw in audit process?

Additional director of MGNREGS, Tamil Nadu, G Muthumeenal disagrees that Tamil Nadu is the most corrupt, and cited the lack of audits from certain other states.

She points out that lack of proper training among social auditors also led to wrong entries and reflected incorrect data on the MIS.

“People engaged in social audits are mostly NREGA workers who have completed 10th grade. They are trained for only three days and the government cannot expect them to be complete watchdogs,” Muthumeenal says.

In many cases, if there are three issues in the same project, the report generates three times the cost of the project value, which ideally would be a wrong way to calculate, she explains.

Besides, she adds that due to a system glitch, the social auditors could not upload the action taken report for the last two years.

“Time and again we have highlighted the issues to the Centre. They have taken cognisance of the concern and accepted that corruption, as reported in the media and as reflected in the MIS, are not true,” she says.

In another case in the same village, one Ms Selvi was paid ₹10,752 for a similar project. The payment was split over a period of three months and paid to her account. Muthumeenal again blamed the social auditors.

“In most cases, the social auditors go to villagers’ houses and ask if they worked under the scheme on a specific date and if the villager, who might or might not remember what happened a year before, they will account it as not worked. How is that right?” she asks.

Another officer noted that the lack of appointment of local body representatives between 2016 and 2019 could have led to an increase in pilferage. The local body elections which were due in October 2016 was postponed following the ill health of then-chief minister J Jayalalithaa. Her death subsequently led to a power tussle and split in the party, delaying the process.

Last-mile hurdles

Of the many reasons of ineffective social audit, ombudspersons say the lack of awareness among NREGA workers is very prominent.

“There is little awareness about us among people. They barely know ombudsperson. In the last 10 months I have received a mere 14 complaints. And most are complaints of process violation cases which arise from political opponents,” says Riyaz Ahamed, a retired government official serving as an ombudsperson in Karnataka’s Chikkamagaluru.

An independent survey in Karnataka revealed only 4–6 per cent of the SC/ST population and about 1/10th of the overall workers were aware about ombudspersons.

Often ombudspersons tend to be retired government officials and enjoy little independence. They get ₹1,000 per sitting (maximum 20 sittings allowed) from the central fund and an honorarium of ₹10,000 per month from the state fund.

Some existing and retired ombudspersons say financial constraints with delay in salaries and allowances, lack of mobility, and lack of punishing powers demoralise them. The lesser the complaints, the lesser one earns as the sitting fees are a form of variable payment.

Former ombudsperson KL Subramanya says in many cases, political appointees grab the post and hence fail to act independently.

According to a report titled “MNREGA: Ombudsman a forlorn scarecrow: Issues and ways forward in Karntaka” by Institute for Social and Economic Change (ISEC), ombudspersons have failed to inspire confidence in people about their remedial abilities.

The report notes that very few cases come before them, and that too, largely arising out of local political rivalry. And in the cases where actions are recommended, the unwillingness by local authorities in initiating disciplinary inquiry or criminal case reduce the efficacy.

The report goes on to say that ombudspersons have hardly contributed to check and reduce corruption in MGNREGA and have failed to provide justice as expected.

“Ombudspersons are potentially a low-cost, time-effective accountability institution. They can substantially improve the quality of MGNREGA implementation by plugging leakages and suggesting improvements. It is a low hanging fruit which the government could inject life in,” says professor S Madheswaran of ISEC.

(With additional inputs from Puthiya Thalaimurai’s Abdul Nasar from Sivagangai)