MGNREGA: An Introduction


Introduction: Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) is a employment guarantee scheme enacted by legislation on August 25, 2005. Most significant fact about it is that it is considered as a right of a rural citizen to work for minimum 100 days in a year if he/she is willing to work and job should be provided to him/her by authorities within a given time-frame(within 15 days) otherwise state government is liable for paying  Unemployment allowance. Wages are also well defined in the scheme.

Implementation: Each state has launched an employment guarantee scheme for its implementation. Basic unit of implementation if block, there is a programme officer on each block. The main implementing agencies are Gram Panchayats and it has accountability towards Gram Sabha. Gram Panchayats are also have power to make plans by suggestions for gram sabha.  Job card are issued by Gram Panchayats and incentives are deposited to the bank accounts of employees. Provision of social audit is also there under the name ‘hamara paisa hamara hisab’. Works related to rainwater harvesting and conservation, desilting of canal distributaries, desilting and renovation of old ponds/tanks and digging up of new farm ponds are mainly being carried out under NREGS.


Funding: The cost of payments of wages are taken care by Central Government, 75% of material cost and also a share of administrative cost. The implementation part is done by State Governments as in many schemes. Unemployment allowance is provided by state government, so that state should take care of  proper employment opportunity under this scheme. 25% of material cost is also provided by State.

One unique fact about NREGA  is that it  has provided a fair opportunity to people from rural India to earn their own income without any discrimination of caste or gender. Most remarkable feature of NREGA is that it pays women the same as men, something that was virtually unimaginable in rural India.


The main drawback of this scheme is lack of durable asset creation. Yes it is true that it had created a lot of opportunity in rural areas, and employment is also given to rural un-skilled citizens, but  success of NREGA should not only be assessed in terms of employment provided but also the asset created. In that matter it is not as successful as it should be.

The Controller and Auditor General (CAG) of India, in its performance audit(2011) of the implementation of MGNREGA has found “significant deficiencies” in the implementation of the act.

A recent study by R. Jha and R. Gaiha, India’s National Rural Employment Guarantee Scheme as it is — Interpreting the Official Report, using official data, concludes that “it is difficult to escape the conclusion that the NREGS has not performed well…. It is difficult to rationalise providing even more funds to this initiative.” They also find that “official claims of higher agricultural wage rates and lower migration are mostly exaggerated, if not fantasised…field-report suggests a growing sense of entitlement”

According to NREGA guidelines, payments for the work should be made within 14 days of the completion of the work. However delay in payment and incorrect payments are a common problem under NREGA. A Bench comprising Chief Justice K. G. Balakrishnan and Justices Deepak Verma and B. S. Chauhan of Supreme Court also found that “There is no uniform policy. The money is not reaching actual beneficiaries,” in a judgement in July 2012.

IN conclusion  NREGA cannot be a long-term solution to the unemployment problem of rural India. A comprehensive and a more sustainable solution that creates large-scale self-employment opportunities in the secondary and tertiary sectors in the rural areas, stimulates demand and last but not the least, increases rural productivity still need to be found.

India’s National Rural Employment Guarantee Scheme as it is — Interpreting the Official Report

(Sources: Ministry of Rural Development)


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