NEW DELHI: In an effort to prevent delay in payments to workers under the rural employment guarantee scheme, the Union Cabinet has approved direct benefit transfer to beneficiaries of the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS). 

Delayed payments has been one of the biggest criticisms of the scheme that has been allocated Rs 34,000 crore in the current fiscal year, which can be raised Rs 5,000 crore more if revenues pick up. Direct benefit transfer ensures that scheme funds do not get indefinitely parked with the state finance departments. 

The rural development ministry will release the money directly into the State Employment Guarantee Fund once a finance order has been generated. Only the amount for which a financial transfer order is generated will be transferred into the state's fund. Direct benefit transfer will then be made through electronic fund management system to the bank and post office accounts of workers. The National Rural Employment Guarantee Act requires workers to be paid within 15 days of closing the muster roll.
The ministry, which administers the programme, had also proposed direct payment of wages to beneficiaries from the Centre instead of multiple layered channels involving the states' finance and rural departments. "The finance department would take 10 days to over a month in moving the payment forward. This problem will now be solved," a senior government official said. 

Once the pay or the financial transfer order is generated by the state government, the payment will go through from the central government resources to state's employment guarantee fund and thereafter to the beneficiary. In 2014-15, only 28 per cent of the payments could be made on time to the workers under the scheme. 

Employment provided under the MNREGS has been on a decline for the past few years. The average number of days of employment per household under the scheme fell to 40.14 in 2014-15 from 45.97 in the previous year.