Caste-based NREGS Wages Payment System


From UPSC perspective, the following things are important :

Prelims level: MGNREGS

Mains level: Wage payment issues in MGNREGS

Parliament’s Standing Committee on Rural Development and Panchayati Raj has asked the government to roll back the system of caste-based wages, under which NREGS workers are paid based on whether they belong to a Scheduled Caste, Scheduled Tribe, or Others.

Back in news: MGNREGA

What is the caste-based payment system?

  • Last year, the Rural Development Ministry sent an advisory to states asking them to take necessary action for payment of wages to NREGS workers according to their categories — SC, ST, and Others.
  • Under the new system, if 20 individuals (say, six SCs, four STs and 10 others) work together at a site under MG-NREGA, a single muster roll would be issued.
  • But payment would be done by issuing three separate Fund Transfer Orders (FTOs), one for each of the three categories.
  • Due to this, some beneficiaries started complaining that despite working at the same site and registering on the same muster roll, they were getting their wages at different times depending on their categories.
  • Beneficiaries in the ‘Others’ category, which includes the ‘General’ and Other Backward Classes (OBC) categories, especially complained of delays.

What was the earlier system of payment?

  • The Rural Development Ministry notifies wage rates for states and Union Territories under Section 6(1) of The Mahatma Gandhi National Rural Employment Guarantee Act, 2005.
  • Until 2020-21, the wages were being paid to NREGS beneficiaries through a single funds transfer order.
  • In other words, if 20 beneficiaries, including SCs, STs and Others work at a site under MGNREGA, all received their wages at the same time, through a single muster roll and a single funds transfer order.

Why was the system of caste-based wage payment introduced?

  • According to the Ministry, the system of category-wise payment of wages was introduced to “accurately reflect on the ground flow of funds to various population groups”.
  • Last year, a process of “streamlining” of the new system was taken up.


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