Ex-finance secy writes to Modi govt, red-flags ‘gaps’ in last-mile delivery of welfare schemes


Released by Sarma, the report says 50 percent of workers under the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) in a tribal area in Andhra Pradesh had to travel significant distances and even suffer the loss of wages in order to access the money transferred to their bank accounts. 

“While the concerned ministries may successfully transfer monetary benefits to individuals’ bank accounts, what travails do beneficiaries face in encashing them?… How easy is it for a beneficiary to encash the benefits and how long does it take? Does the beneficiary have to spend money (to pay intermediaries) and time (lost wages) to encash the benefit?” Sarma said in his letter. 

According to the MGNREGS portal, 197.02 lakh households had job cards in tribal areas across India in 2022-23, out of which 102.43 lakh were provided employment.

The central government has raised budgetary allocation for CSS from 7.5 percent to 48 percent in the last nine years, Sarma wrote in the letter.

Sarma cited the imperfections in the delivery system and “absence of adequate feedback system”, and wondered if the “total budgetary CSS allocation of Rs 4,76,105 crore during 2023-24 would be used effectively”. The problems, he said, are exacerbated in remote areas, “where the banks’ outreach is limited, connectivity is poor and computer literacy is inadequate”.

ThePrint has reached the finance ministry via email for a comment on the concerns raised.  

When contacted, Andhra Pradesh government officials told ThePrint that no such issue has been brought to their notice. E. Ravindra Babu, additional director of tribal welfare in the state’s directorate of tribal welfare, said: “We have a village secretariat system under which we have one volunteer for every 20 households in tribal areas. If people face any issue, the matter is reported to the officials concerned. So far, we have not received complaints regarding people facing difficulty in withdrawing their money from disbursement agencies”. 

Also Read: MGNREGS hits record with 3.1 crore families seeking work in May. It’s a cry for help from Bharat

Difficulty in accessing govt benefits

LibTech India,  a non-profit organisation that works towards “improving transparency, accountability, and democratic engagement”, according to its website, conducted its study in Paderu. According to its study, over 50 percent of the workers engaged in MGNREGS here had to spend Rs 200 on travel while 10 percent spent Rs 400 to withdraw money from their bank accounts “on a single visit”.

In addition, it said, workers suffered loss of wages on account of travelling long distances to access banking systems.

The study involved interviews with 877 workers.

It analysed four disbursement agencies — banks, ATMs, business correspondents (BC) and customer service points (CSP) — for DBT transfers, a programme through which payments are made directly into the Aadhaar-linked bank accounts of the beneficiaries.

A business correspondent is an extended arm of a bank providing financial and banking services to customers in unbanked and underbanked areas, while a customer service point is a physical location where customers can access a range of banking and financial services.

“Around three-fourths of workers reported missing work while visiting the disbursement agencies (bank/ATM/business correspondents/customer service points). More than 90 percent missed at least one day and 25 percent missed at least two days of work,” LibTech India said in a statement. “As a result, 95 percent of workers who missed work had to forgo more than Rs 100, and three-fourths of them had to forgo Rs 200 or more.” 

Chakradhar Buddha, a senior researcher at LibTech India, said MGNREGS workers have to often make multiple visits to withdraw money due to multiple factors. 

“The study found that nearly one-third of workers had to make multiple visits to the disbursement agencies due to wage credit issues due to infrastructural problems like overcrowding, network failure, and cash shortages,” he told ThePrint.

In his letter, Sarma said the government must get social audits done to know about the “deficiencies in implementing its schemes and bring in improvements on a continuing basis”.

“The LibTech report elaborates its findings in more detail, which in my view, needs to be studied by your ministry in consultation with the other ministries so that the last-mile delivery system could be streamlined to ensure that there is greater transparency, efficiency in realising the expected outcomes and accountability,” Sarma’s letter said. 

‘The same everywhere’

Activists say the situation is the same in other tribal areas. Sameet Panda, a member of NREGA Sangharsh Manch and state convenor of the Right to Food Campaign in Odisha, said access to banks and other disbursement agencies is a challenge for people living in tribal areas.

According to MGNREGS portal, over 10.8 lakh households out of 16.78 lakh eligible ones were provided employment under MGNREGA in Odisha’s tribal areas in 2022-23. 

“It’s not just for NREGA but also for other social schemes — including old-age pension — that people have to travel long distances to withdraw money,” Panda told ThePrint. “Often they have to wait for hours as there are long queues at banks. While technology has been introduced to make the system more efficient and transparent, it is not really helping these people, who are mostly uneducated.” 

In Jharkhand, the lack of basic infrastructure often poses a huge challenge for people to access their bank accounts. 

“The first thing that should be done is to bring banking facilities closer to people so that they don’t have to travel long distances. A lot of work has to be done in upgrading the basic infrastructure before use of technology-based payment is made mandatory. In many areas, lack of network, electricity etc are a huge problem,” James Herenj, convenor of Jharkhand NREGA Watch, told ThePrint.

In order to address these issues and bring banking facilities closer to people, the report recommends upgrading infrastructure, such as electricity and internet connectivity. 

“The central government must uphold the constitutional rights of tribal areas and grant them the autonomy to devise their NREGA implementation without Aadhaar-related compliances. In remote regions with sparse network coverage, cash payments should be considered as an alternative,” senior LibTech India researcher Chakradhar Buddha told ThePrint. 

He further said: “Additionally, bringing customer service point/business correspondents under social audits and establishing robust regulatory mechanisms for monitoring their operations is essential. Moreover, a dedicated mechanism should be established to register citizen grievances concerning CSP/BC services.”

(Edited by Uttara Ramaswamy)

Also Read: What is the ‘Jan Dhan Account-Aadhaar-Mobile’ trinity & has it aided India’s war on poverty?


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