Accounts of corruption

SINCE April-May 2008, the Central government has insisted that NREGA wages be paid exclusively through savings accounts opened for workers in nearby banks and post offices. A major public relations campaign has tried to present this as a solution to corruption. So much so, the progress of the NREGA is being measured in terms of the number of accounts opened an impressive 4.22 crore, according to a recent statement by the Rural Development Ministers office. This extraordinary investment of energies must, however, be viewed with caution. A recent social audit of the NREGA at Karon block in Jharkhands Deogarh district showed that corruption persisted, at times with the collusion of banks themselves.

Manchan Rajwar of Ranidih panchayat had no reason to suspect that his NREGA account at the Deoghar-Jamtara Cooperative Bank had been activated. Severely crippled, he had not worked at the site where his name figured, nor signed any withdrawal slips. His passbook was blank. However, an inspection of bank records (during a social audit in October 2008) revealed that many transactions had been made over a whole year. It turned out that middlemen were siphoning off NREGA funds through his account in collusion with bank officials.

Similar tricks were played on many other workers in Ranidih, and also in Ganjebari panchayat where they were paid through the post office at Madankatta. The amounts moving through these accounts could add up to as much as Rs.9,000 within 14 months for a single account.

Even where collusion is not as blatant as in Ranidih, making payments through banks is fraught with vulnerabilities. First, little effort has been made to integrate bank payments with other transparency safeguards, such as payment of wages in public and regular updating of job cards. In fact, there is a dangerous tendency to assume that these safeguards are redundant when wages are paid through banks or post offices.

In Dungarpur district in Rajasthan, the traditional safeguards worked, and bank payments were at least initially a step back. Where bank payments were in place, we found (in our May-June 2008 survey) that job cards were not updated and that muster rolls were no longer read out in public at the time of wage payments.

Second, bank payments have often increased delays in wage payments. In Rajasthan, for instance, where wages used to be paid regularly, teething problems with bank payments last summer caused delays of up to 50 days. Such delays cannot be tided over by NREGA workers and must be treated as a serious violation of the Act.

The combination of opaque procedures and delayed payments has created new opportunities for middlemen. Many middlemen have privileged access to panchayat- and block-level officials and are often the first to know when wages have been credited. They then collect workers (both real and fake) and escort them to the bank. There, a combination of loans, coercion and (sometimes) monetary enticements is used to induce workers to hand over the money they have withdrawn. At Karon block, workers from Mahua Tand, Tekra and Ganjebari panchayats stated publicly that this had happened. They had been paid in cash at the rate of Rs.60-70 a day, while the stipulated minimum wage was Rs.86.40. In some cases, middlemen collude with the panchayat sevak to inflate muster rolls, steer the inflated payments through peoples bank accounts and pocket the difference.

Bank payments have also resulted in new complications. For instance, banking procedures have not been publicised at all. Most workers do not know how to operate bank accounts. This, in turn, increases their dependence on intermediaries.

Another serious irregularity in many places is the opening of accounts solely in the name of the male head of the family. This makes it hard for women to keep their own wages. Other problems include extractions from workers to open accounts; people without accounts being turned away from worksites; workers having to spend time and money to withdraw their wages when banks are far away; and staff shortages in banks and post offices.

So far, the introduction of payments through banks has been little more than a stampede for opening accounts. Crucial guidelines and safeguards have been ignored. Consequently, the aim of ending corruption in wage payments has not been achieved. This can only happen when bank payments are combined with other transparency safeguards, as has happened to some extent (with post office payments) in Andhra Pradesh. Otherwise, as is already happening, new vulnerabilities will get entrenched.

On the bright side, this experience has demonstrated the Centres ability to enforce critical guidelines. This power could be used to put in place a more comprehensive structure of vigilance and transparency.

Anish Vanaik