In order to expedite the release of National Rural Employment Guarantee Act (NREGA) funds and their proper and effective use, the rural development ministry has proposed a system that requires state to present their labour budget online.

The states will also have to fulfill certain conditions before the release of the funds. A letter to this effect was sent by the rural development secretary BK Sinha to the secretaries (in charge of NREGA) of all the sates on May 31st.

“A software is being generated for online submission of financial proposal based on a set of parameters as a prerequisites,” said the rural development secretary in his letter.

The centre releases the NREGA funds in two tranches. The first tranche is released immediately after the labour budget is agreed to and the second tranche is released after the centre evaluates the progress of work for which the first tranche was released.

Earlier the preparation of the labour budget and its submission was done on paper and presented to the centre in files leaving ample scope for financial bugling and delays.

Henceforth the states will not only present their proposals online they will have to fulfill certain prerequisites before each of the tranches are released.

The online presentation of the labour budget will help in faster disbursal of the funds and also effective monitoring of the scheme.
The prerequisites that states have to fulfill before the release of first tranche are as follows

• District wise opening balance figures as on April 1 of the financial year for which 1st tranche would be released

• District wise and month wise projections of the labour demand and the fund requirements as per agreed in the labour budgets

• Accounts of the financial year before last should have been settled

• Settlement of audit paras

• Satisfactory reply to all the clarifications sought by the ministry Some of the prerequisites for the second tranches are as follows

• Updated physical progress in terms of employment demand generated (persondays) and financial progress have been reported

• Full state share proportionate to central release till then is released and received by the districts

• Expenditure incurred reaches 60% of available funds

• 100% reporting is made on MIS

• Provision for Bharat Nirman Rajiv Gandhi Sewa Kendras

• Proposals to be accompanied with complete audit report if the same is submitted on October 1st and thereafter

• Ombudsman to be instituted before coming up for 2nd tranche

• Consistency in opening balance and closing balance as per audit report, UC and MPR of the last year

• Conduct for regular social audit. Findings of social audit to be uploaded and action taken on findings within 3 months to be on MIS