The Cabinet, chaired by Prime Minister Narendra Modi, approved the scheme for better implementation of the MNREGA and provide empowerment of states.
As per the scheme, the wage component of MGNREGA will be released following the State Employment Guarantee Fund window direct to the worker's accounts based on a fund transfer order to be generated by states' implementing agencies in accordance with procedures prescribed by Rural Development Ministry.
The move is aimed at further streamlining the fund flow system and to empower state governments or grass-root implementation agencies to deliver entitlements as per the objectives of the Act.
The proposed system would benefit all stakeholders and improve overall efficiency of implementation and workers would be assured of payment of wages in the second day of the pay order generation, official sources said. The scheme will also ensure bring greater transparency in movement of funds and lesser levels of corruption in MNREGA.
They said while state governments would be able to spend more time in planning and improving the process efficiency, without bothering to manage funds for implementation, while the Central government would gain by releasing what is actually expendable.
The gram panchayats would also be empowered to take up work according to the agreed labour budget, without struggling for release of funds.
Sources say that despite implementation of the electronic fund management system (e-FMS), delays in payments have been increasing due to delays in release of funds by Central government, multi-level release system, continued parking of funds at various levels and inability of implementation agencies to get funds in time for payment.
This, they added, called for further steps to improve the system to assure timely availability of funds as per demand.