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India: Letter from trade union platform protests modified rules that would reduce compensation for delayed wages in NREGA

3 February 2014

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NREGA: The Rashtriya Mazdoor Adhikar Morcha, a platform of trade unions, membership-based organisations, NGOs and individuals, has written a letter to the Minister of Rural Development Jairam Ramesh to protest against the recent amendments that are being planned in the rules which could drastically reduce the compensation to workers for delayed payment of wages.

Rashtriya Mazdoor Adhikar Morcha

To Shri Jairam Ramesh,
Minister for Rural Development,
Government of India,
Krishi Bhawan
New Delhi

Date:- 18 January 2014

Dear Sir,

Rashtriya Majdoor Adhikar Morcha is a platform of trade unions, membership based organisations and NGOs or individuals working with the workers who are the main beneficiaries of NREGA. We have been greatly perturbed by the recent changes that are being planned in the rules for compensation to workers for delayed payment of wages. We give the details below.

On 24th September 2013, the Government of India issued a gazette notification amending section 30 of Schedule II of the National Rural Employment Guarantee Act.

"30. (a) In case, if the payment of wages is not made within fifteen days from the date of closure of the muster roll, the wage seekers shall be entitled to receive compensation for the delay in the payment of wages, at the rate of one-fourth of the unpaid wages, up to the delay of fifteen days beyond the sixteenth day of closure of the muster and, at the rate of one-half of the unpaid wages, if the delay is beyond the period of thirty days from the day of closure of the muster.
(b) Any delay in payment of compensation beyond fifteen days from the date it becomes payable, shall be addressed in the same manner as to that of delay in payment of wages.
(c) For the purpose of ensuring accountability in the payment of wages and to fix the responsibility in the delay of payment of wages by various functionaries or agencies, the States shall divide the processes leading to determination and payment of wages into various stages..... and
(v) prescribe stage-wise maximum time-limits along with the functionary or agency responsible for discharging the specific function.....
(d) The NREGASoft or Information Technology System (IT System) shall have a provision to automatically calculate the compensation payable to the wage seeker based on the date of closure of the muster roll and the date of deposit of wages into the accounts of the wage seekers.
(e) The State Government shall pay the compensation amount for delay in the payment of wages after due verification, within the time-limits prescribed in sub-paragraph (a) and thereafter recover the compensation amount so paid towards delay in the payment of wages, from the functionaries or agencies responsible for the delay in the payment, after due verification."

This notification was very welcome, as it would have meant that a substantial compensation. For example, a compensation of about Rs.1361.25 would have been payable on a wage rate of Rs.151 for all delays beyond 60 days of closure of the muster roll, and would have been a substantial deterrent for late payments.

The Government of India however has now proposed a fresh amendment to this section. (page 11 of the notification at While the rest of Section 30 is more or less unchanged, the amount of compensation has now been reduced to 0.05% per day of delayed wages. With the same wage rate of Rs.151, the compensation for delay in payment of wages 60 days after closure of the muster roll would now amount to Rs.40.77. The compensation would be at around 7- 8 paise per day. Surely you will agree that this ridiculous amount is an insult to the suffering that workers have to endure as a result of delayed payments. You are aware that this suffering is so great that in several cases workers have even committed suicide.
As it is, the MGNREGA wage rate is extremely low and is barely a survival rate. Delay in payment makes a mockery of their labour and their right to dignified livelihood as citizens.. The administrative system has had enough time over the past seven years to develop mechanisms to ensure smooth functioning and timely payments. The failure of the system should not lead to penalization of workers who, in these times of falling employment opportunities and galloping prices are as it is, facing a survival crisis.

Please note that delayed payment of wages is more the rule than the exception all over India and is one of the main problems hampering the implementation of the NREGA. Workers from the most deprived areas generally lead a hand to mouth existence and need wage payment on a daily basis if they are to feed their families. In Bandapani Tea Estate in West Bengal, which has been closed for 7 months now, delay in payment of NREGS wages have resulted in 8 starvation deaths. Despite such tragic incidents, 60-90 days of delay in payments of wages have been common from the inception of the Act in 2006.

Practically no steps have been taken to ensure that workers get compensated for the delays. As a result, forced migration continues in the areas which need NREGA the most. Worker participation in the program has slumped drastically. This is especially true of dalit and adivasi workers. Chronic delay in payments is the main reason for this withdrawal. You are aware of the horrible and tragic case of Kalahandi migrant workers whose hands were chopped off by contractors. While this is an extreme case, it does indicate the kind of bondage that workers are facing when forced to migrate as a result of the failure of MGNREGA to provide an effective safety net or meet its stated objectives.

This is the first time the Central Government has taken any step to ensure that compensation for delayed payment of wages is institutionalised and that systems are put in place for automatic payment of compensation. However, if the compensation is paltry and amounts to only 0.05% per day, it will defeat the very purpose of compensating people for suffering. Outmigration in deprived areas where people need this work the most would continue.

After seven years, surely there is little excuse for delay in wage payment, and unless this delay is strictly penalized, the purpose of the Act is defeated. The attempt to reduce the compensation indicates an unpardonable non-seriousness of the government in addressing the problem, and an insensitivity to the suffering that workers are being put through due to administrative failure.

We therefore strongly demand that the Gazette Notification dated 24th September 2013 be kept in force and should not be amended any further.

With regards,

Yours sincerely

Present Secretariat: c/o Paschim Banga Khet Majoor Samity, 1 Shibtala Road, Village Maheswarpur, PO Badu, Kolkata-700129. Fax:033-2538-2064, M. 9433002064 email id: rastriyaadhikar at