Touted as one of the successful schemes for raising rural incomes, the UPA government?s flagship Mahatma Gandhi National Rural Employment Guarantee (MGNREGA) scheme has drawn flak from the Comptroller and Auditor General of India for inadequate funding in poorer states, apart from other irregularities, such as non-payment of wages, diversion of funds and non-completion of work.

CAG, which in recent years, has slammed the government on a number of accounts ranging from 2G telecom spectrum sale to coal allocation and recently the farmers’ debt waiver scheme, said that performance audit revealed that the ?intended beneficiaries had not been able to fully exercise their rights? from the MGNREGA scheme that guarantees 100 days of jobs to every rural household willing to take up manual labour.

?Three states ? Bihar, Maharashtra and Uttar Pradesh ? had 46% of the rural poor in India, but accounted for only about 20% of the total funds released under the scheme. This would indicate that the poorest of the poor were not fully able to exercise their rights under MGNREGA,? CAG said in a report to parliament.

Though the government has spend a total R1.58 lakh crore for MGNREGA between 2007-08 and 2011-12, CAG said: ?The expenditure in the last three years had not increased significantly, rather it declined in 2011-12.? The expenditure on MGNREGA almost doubled from R15,856.89 crore in 2007-08 to R27,250.10 crore in 2008-09 and further to R39,377.27 crore in 2010-11 and, then, declined to R38,034.70 crore in 2011-12.

The number of persons per day employment increased from 143.59 crore in 2007-08 to 216.32 crore in 2008-09 and further to 283.59 crore in 2009-10, but then declined to 257.15 crore in 2010-11 and 216.34 crore in 2011-12 even as wages offered under MGNREGA rose from R75 per day to R115 in five years. ?Even though the average wage cost or wage paid was rising, the benefits to a rural household was negated by the decline in employment provided per household,? CAG said.

Pointing to the discrepancies, the auditor said: ?In the test checked gram panchayats, it was noticed that in over 47,687 cases, the beneficiaries were neither provided employment on demand nor received unemployment allowance.?

Widespread instances of non-payment and delayed payment of wages were observed in 23 states.

In 18-54% cases, the CAG observed non-maintainance or incorrect records. Works worth R2,252.43 crore, which were taken up under the scheme, were not permissible while works worth R4,070.76 crore were incomplete even after 1-5 years. ?It was also noted that expenditure on works amounting to R6,547.35 crore did not result in creation of durable assets. Cases of diversion of funds for other uses were also seen in a large number of states,” CAG added.

Criticising the rural development ministry for flouting rules, CAG said: ?The larger issue in relation to works was the non-adherence to the statutory 60:40 wage-material ratio. The ministry in contravention of the Act, which stipulates that this ratio has to be maintained for each work, relaxed this provision.?

The deviation from the rule led to lower employment generation of 15.03 crore persondays during the five years ending 2011-12. The ministry also released grants in excess of demand, breaching its own conditionalities, CAG added.