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Audit reveals massive corruption in India jobs scheme

Nearly half a billion US dollars in question

Audit reveals massive corruption in India jobs scheme
Tribal workers demand unpaid wages which they should have received through the scheme
Swati Deb, New Delhi

April 24, 2013

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Irregularities have crippled the implementation of a job guarantee program introduced eight years ago, leaving "the poorest of the poor" still unable to exercise their rights, according to a government auditor.

The Comptroller and Auditor General (CAG) of India found improper diversion of funds, tampering with payrolls and impermissible works undertaken, to the tune of about 22.52 billion rupees (US$417 million) in its review of the scheme known as MG-NREGA, the Mahatma Gandhi National Rural Employment Guarantee Act.

Submitted in parliament on Tuesday, the report claimed that the states of Bihar, Maharashtra and Uttar Pradesh, which together account for 46 percent of India’s rural poor, utilized only 20 percent of allotted funds for the work scheme.

"This indicated that correlation between poverty levels and implementation of the scheme was not very high," it stated.

"This would indicate that the poorest of the poor were not fully able to exercise their rights.”

The job guarantee scheme, introduced in 2005, theoretically provides a legal guarantee for at least one hundred days of employment every year for villagers willing to take up public work-related manual jobs.

Workers get a daily minimum wage of 120 rupees (US$2.20). During the 2010-11 financial year, the government paid out four billion rupees (US$73 million) for the scheme.

The report observed that employment generated by the scheme declined from 54 days to 43 days between 2009 and financial year 2012.

It also said that the highest number of ghost workers – workers who exist only on paper – was found in the southern state of Karnataka, while misappropriation of funds was highest in the eastern state of Assam.

Opposition parties say the audit points out the clear failure of the scheme.

Socialist parliamentarian Shailendra Kumar told that it "exposes the lapses in the implementation process. It shows the hyped scheme has not achieved the desired results."

Another lawmaker, S Adhikari of the regional party Trinamool Congress, said it was "a serious issue" that funds worth million of rupees were released "without exercising proper financial controls."

The audit saw "deficiencies in the approval and release of funds by the ministry. Numerous instances were noticed in which the ministry released grants in excess of demand and in breach of its own conditions," the audit said.

However, the federal Rural Development Minister Jairam Ramesh blamed the Finance Ministry. 

"We have created a complicated system of funds release. I have sympathy with many states. Frankly, these are imposed on us by the finance ministry," Ramesh told a media conference just hours after the report was tabled in parliament.

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