Savings a/cs must for NREGA wage payments

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New Delhi, Aug 29: In a bid to stop delays and irregularities in wage payment under the mega National Rural Employment Guarantee Act (NREGA), the Centre on Friday made it compulsory for the states to pay wages through savings bank accounts of all the 3 crore workers.

According to the minister for rural development, Raghuvansh Prasad Singh, since October 1, the “payment of wages in cash would be considered illegal”. The massive initiative to include all the NREGA workers, most of whom are below the poverty line (BPL), under the formal banking system was taken following several reports about irregularities in the payment of wages, reported to the rural development ministry.

Following the instructions from the Centre, 2.92 crore savings accounts with banks and post offices have already been opened across the country. While 1.4 crore savings accounts have been opened with state-owned or cooperative banks, 1.49 crore accounts have been opened with post offices. This is the largest number of bank accounts linked to a development programme, across the globe. “For those areas which do not have banks and post offices, we have prepared a business correspondent model, under which non-government organisations would take the responsibilities of disbursing the wages under NREGA,” Singh said.

Banks and post offices, following the instructions of the ministry of finance and the ministry of communication, have already waived off the initial deposits, to be made prior to the opening of the account for NREGA workers. In addition to this, all the accounts holders would be covered under the Janashree Bima Yojana (JBY).

The finance ministry has recently given its nod to cover all the workers under the NREGA, in the rural poor category so that they could reap the benefits of the JBY. The JBY provides for life insurance protection to people living below the poverty line and marginally above the poverty line. The premium under the scheme is Rs 200 per annum, per member. While half of the premium would be contributed by the member, the nodal agency or the respective state government, the balance will be borne by the Social Security Fund.

However, the workers who would be included under such insurance programme, have to fulfill certain criteria before being enrolled in the insurance programme. The workers need to put in a minimum period of 15 days in a year, in order to be eligible for the insurance cover, which would be reviewed each year.