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Sep 28, 2005 States have to pay unemployment allowance: PM Wednesday September 28 2005 00:00 IST NEW DELHI: Prime Minister Manmohan Singh on Tuesday placed the onus of paying unemployment allowance on the states which fail to meet the demand for work within the stipulated 15 days under the recently-enacted National Rural Employment Guarantee Scheme. Under the scheme, estimated to cost Rs 40,000-Rs 50,000 crore depending upon the demand for work, the Centre would be contributing 90 percent, while the states would have to pitch in only with the remaining 10 percent for the provision of wage employment to rural households at least for 100 days a year. The Prime Minister said the unemployment allowance which had to be given to those who did not get employment within 15 days of their demand would be met by the states at their own cost. The daily wage under the scheme has been placed at Rs 60 or the minimum wage prevailing in the states, whichever is higher. The unemployment allowance ranges from 25-50 per cent of the daily wage. The provisions of the relevant Act states that “no such (unemployment) rate shall be less than one-fourth of the wage rate for the first thirty days during the financial year and not less than one-half of the wage rate for the remaining period of the financial year”. This guarantee “requires timely transfer of resources to the implementing agencies so that works can start on demand,” the Prime Minister observed addressing a meeting of state ministers of rural development on the National Rural Employment Guarantee Act 2005 here. To prevent corruption and plug leakages in the implementation of the “path-breaking” Act, Singh said the programme should be “transparent”. “The NREG Act must be transparent and truly a people’s programme. Therefore, methods of estimation and measurement of works and rates of payment for each task should be made transparent. The labour that seeks work must understand what is offered, on what terms and demand its full entitlement. “Similarly, there should be complete transparency in maintenance of muster rolls and payment of wages. There should be fairness all around. That is it intention and purpose of this act,” he said. Noting that a guarantee imposed a legal obligation on the state unlike a scheme which is supply driven, he said the task would require a lot of hard work by states such as in creating perspective plans, setting up institutions for monitoring and for providing technical support, designing smooth financial flows and providing for accountability of the entire process. Singh said that the act was a unique social safety net because its beneficiaries were not passive recipients of doles, but will become active participants in the creation of rural assets.