2. BACKGROUND
Government of India in the Ministry of Rural
Development has introduced Electronic Fund
Management System (e-FMS) as a special
financial solution for expeditious payment of
wages to the job card holders working under the
Mahatma Gandhi National Rural Employment
Guarantee Act
In the MoRD server maintained by the
NIC, Delhi and run through NREGASoft, a
special window has been created to cater to the
e-FMS needs of the states
3. BACKGROUND
Government of India requires all the states to switch
over to e-FMS to ensure speedier payment of wages
The new system is supposed to reduce chances of
pilferage and make the payment system more
transparent
Government of West Bengal has taken a decision to
switch over to e-FMS in a phased manner starting
with a small pilot in one full block in April 2013
The intention is to roll out e-FMS across the state by
end of June 2013
4. PRE-REQUISITES FOR E-FMS
Electronic Fund Management System is at
the end of a process of use of ICT for
MGNREGA implementation. Pre-requisites of
e-FMS are
Use of NREGASoft in complete online mode
Use of Electronic Muster Rolls for capturing
attendance
Complete ICT enabled environment at the level
of all Project Implementing Agencies (PIA)
Use of Digital Signature Certificates (DSC) by
the functionaries
5. STEP-I
Identify area for pilot intervention
Preferably one block
Completely online
Using e-Musters only
Mostly Bank accounts
Preferably in Nationalized Banks
Strong internet connectivity in all the Gram
Panchayats
The block and the GP teams having strong
commitment to transparency, quality and innovations
6. STEP-2
For identified pilot block
Open accounts for all active households, individually
for all members
Verify all active accounts
Name of the worker and account no.
Bank
Branch
IFSC
Job Card Number
On validation take those as the only accounts for all
transactions against the wage seekers in question
(in e-FMS term this is known as freezing of
accounts)
7. STEP-3
Initiate the process of procurement of Digital
Signature Certificates (DSC) for all identified
signatories
DSC is to be procured by name for all individual
users
For procurement of DSC, we would be requiring
details of all the proposed signatories
Prepare guidelines drawing money through
e-FMS
Arrange extensive training for all
functionaries
8. STEP-4
Open a specific e-FMS account in the SEGF
Earmark some amount for the e-FMS
account
Identify a leader bank for management of the
e-FMS account and technical interaction with
the MoRD server
In association with the banks, open accounts
for all the wage seekers and validate the
existing accounts
9. ACTIVITY FLOW
Gram Panchayat (GP) to register demand
and allocate work
Programme Officer (PO) to generate e-
Musters
GP to print e-Musters
Attendance to be taken in the field by using
e-Musters only
Measurement to be taken, preferably by
using e-MB
10. ACTIVITY FLOW
The PIA to generate wage-lists
Single list for single work, whatever be the bank of the
wage seekers
If there are accounts of wage seekers in Post Offices,
separate wage list may be required
The PIA to generate FTO
(There will be single FTO for a PIA on a day, irrespective
of the number of works/ banks/ branches etc.)
First signatory to verify and authenticate
The Second signatory to approve/ reject
11. ACTIVITY FLOW
The FTO travels directly to NREGASoft and gets
deposited into the e-FMS depositpry
The leader bank to pick the FTO up and segregate
bank-wise
Concerned banks to segregate branch-wise
(The task of segregation, both bank-wise and branch-wise may
also be done by the leader bank. In such a situation, other
banks will only be the recipients.)
Once the amount is deposited into the wage seeker
account, mostly on the same day when the FTO is
generated by the PIA, or on the next day, the wage
seeker is free to withdraw money from the account
12. ACTIVITY FLOW
PIA is to wait for a day to see whether all the
authentications are accepted by the system
If so, enter the transactions in the cash book, both
on receipt and payment sides
If not, write the accepted amount only in the cash
book
Seek reasons for rejection
Rectify
Regenerate the rejected portion of the FTO after
rectification which will be taken as a fresh FTO for
the reconciled amount.
13. •WHAT NEXT?
e-FMS ensures expeditious deposit of wage earned
into the account of the wage seekers
But we need to ensure that the wage seeker can
withdraw money from her account whenever she
wishes
With minimum travel
Without any hassles
Here comes the issue of financial inclusion
The FIP (financial Inclusion Plan) of the banks are
to be vigorously pursued to ensure all wage
seekers have accounts and can get financial
services at the doorstep
Business Correspondents and Local Service Points
might be the solution. This has to be explored.