CAG finds big fund leak in rural job scheme

Published: 24th April 2013 08:09 AM  |   Last Updated: 24th April 2013 08:09 AM   |  A+A-

It can’t get worse than this. The Comptroller and Auditor General (CAG) has detected large-scale misuse of funds, non-payment of wages to the poorest of poor, decline in work days, non-compliance with rules — in short “poor implementation” of the UPA government’s much-touted flagship programme — the  Mahatma Gandhi National Rural Employment Guarantee (MGNREGA) or the 100-day job guarantee scheme.

Though the misuse of funds mentioned by the CAG in its report is not more than Rs 128 crore, what catches the eye is the staggering Rs 4,000 crore expenditure incurred under the scheme for rural development work that has been abandoned, “left incomplete”, midway. All at a cost to the exchequer.

For the UPA government, which has been reeling under the effects of scathing CAG reports on second generation spectrum and coal block allocations, this could be the last straw. Far from being the jewel in the crown, if the CAG report is any indication, the NREGA scheme could be turning out to be a ring of thorns around the UPA. A welfare scheme which the Congress leadership can’t stop publicising.

What is ironical is that the Rural Development Ministry had gone out of its way to invite the CAG to do a performance audit of its scheme. So in deference to the CAG’s report, Rural Development Minister Jairam Ramesh tweeted that the ministry will “take the criticism of the CAG’’ in positive light and “try to improve” the scheme.

Tabled in Parliament on Tuesday, the report states there’s been widespread instances of non-payment and delayed payment of wages in 23 states, under NREGA, including in Congress-ruled Maharashtra, Haryana and Rajasthan. Among the non-Congress states which registered below par performance are Punjab, Uttar Pradesh and Bihar.

Despite NREGA being in force for seven years, the governments of Haryana, Maharashtra, Punjab, Rajasthan and Uttar Pradesh failed to formulate rules for carrying out provisions of the Act, as of March 2012.

It could be damaging for Ramesh as the report says that rural household employment has declined from 54 days in 2009-10 to 43 in 2011. There’s also a substantial decline in the proportion of works completed in 2011-12. Instances of abandoned works or incomplete for a significant period are also considerable. “Works of Rs 2,252.43 crore, which were undertaken under the scheme, were not permissible. It was seen that 7,69,575 works amounting to `4,070.76 crore were incomplete even after 1-5 years.

It was also noted that expenditure on works amounting to Rs 6,547.35 crore did not result in creation of durable assets,” the CAG notes. An analysis of funds released to states for the period April 2007 to March 2012 and poverty data showed that three states - Bihar, Maharashtra and Uttar Pradesh - had 46 per cent of the rural poor in the country, but they accounted for only 20 per cent of the total funds released under the scheme.


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