• MGNREGA is the abbreviation for the Mahatma Gandhi National Rural Employment Guarantee Act 2005.
  • It is a law passed by the Indian government in 2005 that guarantees the “right to work” to rural citizens of India. 
  • It aims to enhance livelihood security in rural areas by providing at least 100 days of wage employment in a financial year to at least one member of every household whose adult members volunteer to do unskilled manual work.
  • Women are guaranteed one third of the jobs made available under the MGNREGA.
  • Another aim of MGNREGA is to create durable assets (such as roads, canals, ponds and wells).
  • Several organizations and people played key roles in championing the cause of the right to work, especially the Mazdoor Kisan Shakti Sangathan (MKSS), renowned development economist Jean Drèze, and many others. 
    • MKSS’s initial efforts at organizing workers working on government drought relief programmes spearheaded the way for sustained activism that led to the creation of MGNREGA. 
  • Implementation Agency: The Ministry of Rural Development (MRD), Govt of India is monitoring the entire implementation of this scheme in association with state governments.
  • The Act aims to follow the Directive Principles of State Policy enunciated in Part IV of the Constitution of India. The law by providing a ‘right to work’ is consistent with Article 41 that directs the State to secure to all citizens the right to work.
    • The statute also seeks to protect the environment through rural works which is consistent with Article 48A that directs the State to protect the environment.

Key provisions of MGNREGA

  • Eligibility Criteria: For receiving the benefits of the MGNREGA Scheme, the following eligibility criteria are to be met by the applicant:
    • Citizen of India
    • 18 years of age at the time of application
    • Rural Household
    • Willing to do unskilled work
  • Guaranteed Employment: The MGNREGA program guarantees 100 days of unskilled employment to all willing rural citizens, at the government-set minimum wage. 
  • Unemployment Allowance: If work is not assigned within 15 days, the applicant is entitled to receive an unemployment allowance. This allowance is 1/4 of the minimum wage for the first 30 days and a half for the following period. 
  • Social Audit: A social audit is a powerful tool for social transformation, community participation, and government accountability. Section 17 of the MGNREGA has mandated a social audit of all the works executed under the MGNREGA. 
  • Preference of employment near residence: The work provided is usually within a 5 km radius of the applicant’s village, with a travel allowance provided for work beyond this radius. 
  • Decentralized planning: Panchayati Raj Institutions take the lead role in planning, implementing, and monitoring the allocated and executed works. Gram Sabhas are given the authority to suggest work and are required to carry out at least half of the work.
  • Implementing agencies are responsible for providing proper working conditions, medical facilities, and compensation
  • Payments are made on a weekly basis and cannot be delayed more than 15 days, with compensation for delays. Complaints can be made and must be addressed within 7 days.
  • Individual beneficiary oriented works can be taken up on the cards of Scheduled Castes and Scheduled Tribes, small or marginal farmers or beneficiaries of land reforms or beneficiaries under the Indira Awaas Yojana of the Government of India.
  • MGNREGA works address the climate change vulnerability and protect the farmers from such risks and conserve natural resources.

Implementation Status

  • The scheme was introduced in 200 districts during financial year 2006-07 and 130 districts during the financial year 2007-08
  • In April 2008 NREGA expanded to entire rural area of the country covering 34 States and Union Territories, 614 Districts, 6,096 Blocks and 2.65 lakhs Gram Panchayat.
  • The scheme now covers 648 Districts, 6,849 Blocks and 2,50,441 Gram Panchayats in the financial year 2015-16.

Significance of MGNREGA

The MGNREGA program aims to provide paid employment opportunities in rural areas. 

  • Infrastructure: MGNREGA has helped to improve the infrastructure and natural resource base of the rural poor, which has had a positive impact on the environment. The program has also helped to improve the accessibility of basic services in rural areas, such as water, sanitation, and housing.
  • Compensating income loss: As per a study conducted by Azim Premji University across four states (Bihar, Karnataka, Maharashtra, and Madhya Pradesh), MGNREGA helped in compensating 20-80% of the income loss incurred because of the Covid-19 induced lockdown.
  • Preventing migration to urban areas: The goal is also to decrease migration from rural areas to urban areas by utilizing the untapped labor in rural areas. 
  • Livelihood: It seeks to improve the livelihoods of the rural poor and create durable assets such as wells, ponds, roads, and canals. 
  • Right-based approach:  Unlike previous employment guarantee schemes, the act aims to combat chronic poverty through a rights-based approach, giving citizens a legal right to work.
  • The program incorporates accountability measures to ensure compliance and transparency at all levels. 
  • MGNREGA best practices:
    • Jalpaiguri: Towards blue revolution through MGNREGA by offering a diverse and stable ploy culture system that allows fish farmers to grow vegetables and raise fish at the same time generating livelihood.
    • Paschim Bardhaman: Poultry shed through MGNREGA empowering women to earn on their own, mobilizing a huge social capital as well as nutrition for children giving a steady source of income to the family.
    • South West Khasi Hills: A group of people from 14 villages through MGNREGA in South West Khasi Hills District came together to create the suspension bridge on the Rilang river to carry their products in the markets of Ranikor.

Challenges and issues pertaining to the Implementation of the Scheme

  • Delay and Insufficiency in Funds Dispersal:
    • Most states have failed to disburse wages within 15 days as mandated by MGNREGA. In addition, workers are not compensated for a delay in payment of wages.
      • This has turned the scheme into a supply-based programme and subsequently, workers had begun to lose interest in working under it.
    • There is ample evidence by now, including an admission by the Ministry of Finance, that delays in wage payments are a consequence of insufficient funds.
  • Caste Based Segregation:
    • There were significant variations in delays by caste. While 46% of payments to SC (Scheduled Caste) workers and 37% for ST (Scheduled Tribes) workers were completed in the mandated seven-day period, it was a dismal 26% for non-SC/ST workers.
    • The negative impact of caste-based segregation was felt acutely in poorer States such as Madhya Pradesh, Jharkhand, Odisha and West Bengal.
  • Ineffective Role of PRI:
    • With very little autonomy, Panchayati Raj Institution (PRI) are not able to implement this act in an effective and efficient manner.
  • Large Number of Incomplete works:
    • There has been a delay in the completion of works under MGNREGA and inspection of projects has been irregular. Also, there is an issue of quality of work and asset creation under MGNREGA.
  • Fabrication of Job cards:
    • There are several issues related to the existence of fake job cards, the inclusion of fictitious names, missing entries and delays in making entries in job cards.
  • Corruption: 
    • There have been instances of corruption, particularly in the form of embezzlement of funds and manipulation of records.
      • For example, a recent example of an IAS officer in Jharkhand was accused of corruption in MGNREGA.
  • Limited job opportunities: 
    • MGNREGA provides only 100 days of employment per person per year, which may not be enough to meet the needs of all rural citizens.
  • Lack of awareness: 
    • Many rural citizens are not aware of their rights under MGNREGA, and as a result, they do not take advantage of the benefits it offers. 
  • Limited financial inclusion: 
    • Limited financial inclusion in the states such as Bihar is also a challenge for the proper implementation of MGNREGA regarding the transfer of wages. 

Positive and Negative outcomes of MGNREGA

Positive outcomesNegative outcomes
Powerful instrument for inclusive growth in rural IndiaNo regular social audits
Livelihood security for the poorLeakage of funds
Creation of durable assets, improved water security, soil conservation, and higher land productivityTechnology and network issues in rural and remote areas for geotagging, etc.
Positive impact on the standard of living of households through an increase in household incomeDelay in payment of wages
Empowerment of SC, ST, and WomenLow wage rate

What are the various reforms that can make the MGNREGA programme successful? 

Some of the suggestions and way forward include: 

  • Urban MGNREGA: One suggestion related to employment under MGNREGA is to extend the program to urban areas. This can help address the issue of unemployment in urban areas and provide employment opportunities for low-skilled workers.
  • Universal Basic Income (UBI) can be a substitute for the MGNREGA as it is more efficient and less leaky than current welfare schemes like MGNREGA.
  • Convergence of MGNREGA with other schemes: This can help ensure that MGNREGA projects are aligned with the larger goals of these schemes and can also help improve the sustainability of the projects. 
  • Innovative measures: Another suggestion is to introduce innovative measures such as using digital platforms for transparency, monitoring, and grievance redressal, linking MGNREGA with the private sector to increase job opportunities, and involving Panchayat Raj Institutions (PRIs) in the implementation of the program.
  • Better coordination: There is a need for better coordination between various government departments and the mechanism to allot and measure the work.
  • Social audit: To improve the implementation of MGNREGA, There is a need to mandatorily hold social audits every six months.
  • Job cards: Job cards should be issued to individuals who are eligible for employment under MGNREGA, not to elected PRI representatives and MGNREGA officials.
  • Gram panchayats need to be provided with adequate resources, powers, and responsibilities to sanction works, provide work on demand, and authorise wage payments to ensure there are no delays in payments.
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