MGNREGS in limbo as TN awaits Rs 1,000 crore in dues

CHENNAI: Nearly Rs 1,000 crore earmarked for material components under the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) scheme for Tamil Nadu is yet to be released, significantly hampering the scheme’s implementation.

The Union government has released the outstanding wage dues along with an additional Rs 919 crore towards the wage component for the fiscal year 2025–2026, but not the funds for material components – raw materials like sand, stones, and cement, and also wages for skilled and semi-skilled workers.

Timely realisation of both wage and material components is crucial to ensure effective execution of the scheme, said stakeholders, noting how the irregular fund flow was forcing authorities to engage contractors and compromise on the quality of the works. It also takes away job opportunities for workers under the scheme.

After a long delay, the Centre sanctioned Rs 2,999 crore towards wages on April 19, disbursing it in phases. This included dues amounting to Rs 2,853 crore for the 2024-25 financial year. Later, an additional Rs 919 crore was sanctioned on July 4 for the current fiscal year.

Subsequently, on July 19, the Union Ministry of Rural Development’s Mahatma Gandhi NREGA Division issued a communication regarding the sanctioning of Rs 31.10 crore towards wage liabilities for 2024–25. “The dues towards wages have been cleared. We have also transferred the amounts to the workers’ accounts,” said a senior bureaucrat.

Despite this, authorities continue to face difficulties in generating man-days for active workers because the implementing agency and more than 12,000 village panchayats in the State are still awaiting dues related to material components.

“We have received Rs 773.93 crore (Rs 580.45 crore from the Centre and Rs 193.48 crore from the State) out of the Rs 1,754 crore allocated for material components. An outstanding amount of Rs 980.93 crore remains as of today,” the official added.

Sources in the department said the delay is compelling local bodies and Block Development Officers (BDOs) to engage contractors for works such as road construction, and building check dams and anganwadi centres, often at the cost of quality. Apart from this, it deprives workers of job opportunities, as contractors tend to rely on machinery and their own labour force.

“Officials (BDOs) have limited scope to complete works, as a result of which they turn to contractors who can provide the necessary capital to buy materials. Due to this, officials have little authority to question the quality of materials or the execution of the work,” said a source.

“Engaging machinery and contractors is a gross violation of the Act. But we have no choice but to depend on them when there are no funds available for upfront payments for materials used in construction activities,” an official from a northern district said on condition of anonymity.

He added that the top officials were “well aware” of the ground realities but remained helpless due to the persistent delays in fund disbursal from the Centre.