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 MGNREGA: A Detailed Overview

  • 31 October, 2021

  • 5 Min Read

 MGNREGA: A Detailed Overview

Context: This topic is important for UPSC GS Paper2

Lowered outlay for MGNREGA, rural guarantee scheme has led to used up allocation and wage delays.

  • That as many as 21 of 35 States/UTs have utilised, by October 29, over 100% of their allocated funds under the Mahatma Gandhi Rural Employment Guarantee Scheme (MGNREGS) for FY2021-22 is not a surprise.
  • In the previous year, the allocations for MGNREGS were increased by ?50,000 crore to meet the demand for work, with the Revised Estimates for spending for the scheme going up to ?1,11,500 crore.
  • MGNREGS was a life-saver for the poor, especially migrant labourers, following the sudden lockdown announced by the Union government.
  • In this year’s Budget, The Finance Minister allocated ?73,000 crore for the scheme, which was higher than the previous year’s absolute number in Budget allocations, but this amounted only to 2.1% of the Budget expenditure, the lowest outlay in those terms in the last six years.
  • By October-end, Kerala, Tamil Nadu, Andhra Pradesh and Himachal Pradesh had utilised more than 130% of their respective allocations for the scheme, indicating the extent to which rural workers depend on the scheme even in relatively better-off States.
  •  The Union government has underestimated the demand for work under the scheme, which even if it involves arduous and menial labour has accounted for a large chunk of rural employment at a time when the economy suffered a steep contraction due to the effects of the pandemic.
  • In response to a report, officials in the Rural Development Ministry accused States of “artificially” creating demand, but this has not been borne out from ground reports which continue to indicate rising demand for work and wages in rural India; civil society activists claim that some workers have been turned away by officials despite the demand for work because of the paucity of funds.

MGNREGS as a scheme, alleviates distress in rural areas in the following way:

  1. From acting as an effective substitute in the absence of crop and weather insurance in aiding poor farm households and helping to provide wages during agrarian crises
  2. To being an avenue for employment during the economic crisis induced by the pandemic and the response, MGNREGS has turned out to be a salve for farm workers and labourers.
  3. Delays in wage payments could also result in a decline in rural consumption, which plays a vital role in stimulating the economy.
  4. Besides the scheme’s utility in distress, it also has the potential, if works are upgraded suitably, to continue to improve rural development and infrastructure.

Way Forward

The Union Government must ensure that the allocation is adequate for wage payments to be done and for demand to be met in the remaining months of this financial year, as MGNREGA is crucial for rural economy and development, where almost 68.8% of country’s population reside.




Source: The Hindu

MGNREGA: A Detailed Overview

  • 30 October, 2021

  • 5 Min Read

Context: This topic is important for UPSC Prelims and GS paper 2.

MGNREGA is important for rural development. It plays a critical role in physical and social infrastructure development in rural areas.


  • The Mahatma Gandhi National Rural Employment Guarantee Act, also known as Mahatma Gandhi National Rural Employment Guarantee Scheme (MNREGS) is Indian legislation enacted on August 25, 2005.
  • The MGNREGA provides a legal guarantee for one hundred days of employment in every financial year to adult members of any rural household willing to do public work-related unskilled manual work at the statutory minimum wage.
  • The Ministry of Rural Development (MRD), Govt of India is monitoring the entire implementation of this scheme in association with state governments
  • This act was introduced with an aim of improving the purchasing power of the rural people, primarily semi or un-skilled work to people living below the poverty line in rural India.
  •  It attempts to bridge the gap between the rich and poor in the country. Roughly one-third of the stipulated workforce must be women.
  • Adult members of rural households submit their name, age, and address with photo to the Gram Panchayat. The Gram Panchayat registers households after making enquiry and issues a job card.
  • The job card contains the details of the adult member enrolled and his /her photo. A registered person can submit an application for work in writing (for at least fourteen days of continuous work) either to Panchayat or to Programme Officer.
  • The Panchayat/Programme officer will accept the valid application and issue a dated receipt of the application, letter providing work will be sent to the applicant and also displayed at the Panchayat office. The employment will be provided within a radius of 5 km: if it is above 5 km extra wage will be paid.

Goals of MGNREGA -

  1. Social protection for the most vulnerable people living in rural India by guaranteeing wage employment opportunities.
  2.  Enhance livelihood security of the rural poor through generation of wage employment opportunities in works leading to creation of durable assets.
  3.  Rejuvenate natural resource base of rural areas.
  4.  Create a durable and productive rural asset base.
  5. Empowerment of the socially disadvantaged, especially, women, Scheduled Castes (SCs) and Scheduled Tribes (STs), through the processes of a rights-based legislation.
  6. Strengthen decentralised, participatory planning through convergence of various anti-poverty and livelihoods initiatives.
  7. Deepen democracy at the grassroots by strengthening Panchayati Raj Institutions.

Key Facts and Provisions of the MGNREGA Act-

  • MGNREGA guarantees hundred days of wage employment in a financial year, to a rural household whose adult members volunteer to do unskilled manual work.
  • 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.
  • Within 15 days of submitting the application or from the day work is demanded, wage employment will be provided to the applicant.
  • Right to get unemployment allowance in case employment is not provided within fifteen days of submitting the application or from the date when work is sought.
  • Receipt of wages within fifteen days of work done.
  • Variety of permissible works which can be taken up by the Gram Panchayaths.
  • MNREGS focuses on the economic and social empowerment of women.
  • Mahatma Gandhi National Rural Employment Guarantee Act provides “Green” and “Decent” work.
  • Social Audit of MNREGS works is mandatory, which lends to accountability and transparency.
  • MNREGS works to address the climate change vulnerability and protect the farmers from such risks and conserve natural resources.
  • The Gram Sabha is the principal forum for wage seekers to raise their voices and make demands. It is the Gram Sabha and the Gram Panchayat which approves the shelf of works under MGNREGA and fixes their priority.

Role of Gram Sabha in MGNREGS -

  • It lists down the works priority-wise w.r.t the potential of the local area.
  • It monitors the work executed within the Gram Panchayat.
  • It acts as the primary forum for social audits.
  • It also works as a platform to resolve all workers’ queries related to any MGNREGA work.

Role of Gram Panchayat in MGNREGS -

  • It is authorized with the role to receive the job applications.
  • After receiving the applications, it is responsible to verify them.
  • All households are registered by the Gram Panchayat.
  • The MGNREGS job cards are issued by Gram Panchayat.
  • It is responsible to allot work within 15 days from the application submission.
  • It prepares an annual report that covers the achievement of the scheme.
  • It holds Rozgar Diwas at every ward once a month.

Role of State Governments in MGNREGS

The important roles of the state government in executing the MGNREGA scheme are:

  1. It frames rules charting out the state’s responsibility under the act.
  2. It sets up the State Employment Guarantee Council.
  3. State Employment Guarantee Fund (SEGF) is established by state governments.
  4. It makes sure to dedicate Employment Guarantee Assistant (Gram Rozgar Sahayak), the PO, and the staff at State, district, cluster, and Gram Panchayat level; for the execution of the scheme.

MGNREGA – State Employment Guarantee Council (SEGC)

The State Employment Guarantee Council is responsible to advise the state government for the implementation of the MGNREG scheme. Some important functions of SEGC under MNREGS are:

  1. The suggestion of improvements in the execution of the scheme.
  2. Evaluation and monitoring of the scheme.
  3. To recommend proposals of the works to the central government.
  4. To be aware of the districts about the scheme and its features.
  5. To prepare an annual report to be submitted by the state government before the state legislature.

Implementation Status MGNREGA Scheme -

  • The scheme was introduced in 200 districts during the financial year 2006-07 and 130 districts during the financial year 2007-08
  • In April 2008 NREGA expanded to the 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.

Activities Covered Under MGNREGA-

  • Union Rural Development Ministry has notified works under Mahatma Gandhi National Rural Employment Guarantee Act, the majority of which are related to agricultural and allied activities, besides the works that will facilitate rural sanitation projects in a major way.
  • The works have been divided into 10 broad categories like Watershed, Irrigation, and Flood management works, Agricultural and Livestock related works, Fisheries and works in coastal areas, and the Rural Drinking water and Sanitation related works.
  • Briefing the MGNREGA 2.0 (the second generation reforms for the rural job scheme) the priority of the works will be decided by the Gram Panchayats in meetings of the Gram Sabhas and the Ward Sabhas.
  • The Rural development also informed that the 30 new works being added in the Schedule 1 will also help the
  • Rural sanitation projects, as for the first time toilet building, soak pits and solid and liquid waste management have been included under MNREGS. Though the overall 60:40 ratio of labour and material component will be maintained at the Gram Panchayat level but there will be some flexibility in the ratio for certain works based on the practical requirements.
  • Construction of the Anganwadi Centre building has been included as an approved activity under the MGNREG Act. Under MGNREGS, expenditure up to Rs.5 lakh per AWC building for construction will be allowed. Expenditure beyond Rs. 5 lakh per AWC including finishing, flooring, painting, plumbing, electrification, woodwork, etc. will be met from the ICDS funds.

Grievance Redressal under MGNREGA-

The office of the Ombudsman is vested with the following powers in order to redress grievances under MGNREGA:

  • Receive complaints from NREGA workers and facilitate their disposal in accordance with law.
  • Require the NREGA Authority complained against to provide any information or Issue direction for conducting spot investigation.
  • Lodge FIRs against the erring parties.
  • Initiate proceedings suo motu in the event of any circumstance arising jurisdiction that may cause any grievance.
  • Engage experts for facilitating the disposal of the complaint.
  • Direct redressal, disciplinary and punitive actions.
  • Report his findings to the Chief Secretary of the State and the Secretary, State.
  • Nodal Department for appropriate legal action against erring persons.

MGNREGA Contribution to SDGs-

1. Goal 1- poverty alleviation

2. Goal 2- elimination of hunger

3. Goal 3- Health and Sanitation

4. Goal 5 - Gender equality

5. Goal 8- Decent work and Economic Growth

6. Goal 9- Infrastructure creation

7. Goal 10- Reduced Inequality

Problems In MGNREGA-

1) Ridiculously low wage rate: Currently, MNREGS wage rates of 17 states are less than the corresponding state minimum wages. Various judgments have upheld that the wage rate cannot be less than the minimum agricultural wage rate of the state. The ridiculously low wage rates have resulted in a lack of interest among workers in working for Mahatma Gandhi NREGA schemes, making way for contractors and middlemen to take control, locally.

2) Insufficient budget allocation: MGNREGA’s success at the ground level is subject to proper and uninterrupted fund flow to the states. Thrice in the last year and once this year, funds have dried up in states due to lack of “mother sanctions” from the Central government which hampers the work in peak season. Almost every year, more than 80 percent of funds get exhausted within the first six months. Thus, the government’s claim of “record allocation” does not hold true in real terms. It has rather decreased as pending liabilities of the last year are also included in the current budget. Moreover, the fund allocation is insufficient to ensure proper implementation on the ground.

3) Regular payment delays: The Union Ministry of Rural Development considers wages paid once the FTO (Fund Transfer Order) is signed by the second signatory. However, delays take place even in the processing of signed FTOs, for which the Management Information System (MIS) does not calculate compensation. Despite the order of the Supreme Court and GO (Government Order) by the Union Ministry of Finance, no provision has yet been worked out in the MIS for the calculation of full wage delays and payment of compensation for the same. Hence, the government’s claims of 92 percent on-time payments generation are misguided. Even a hasty survey on the ground will show that payments are regularly delayed.

4) Workers penalized for administrative lapses: The ministry withholds wage payments for workers of states that do not meet administrative requirements within the stipulated time period (for instance, submission of the previous financial year’s audited fund statements, utilization certificates, bank reconciliation certificates, etc). There is no logical or legal explanation for this bizarre arrangement. It is beyond any logic as to why workers would be penalized for administrative lapses.

5) The banking puzzle: The rural banks are highly de-capacitated in terms of staff and infrastructure and thus always remain hugely crowded. The workers normally have to visit the banks more than once to withdraw their wages. Due to the great rush and poor infrastructure, the bank passbooks are not updated in many cases. Often, the workers do not get their wages during times of need due to the hassle and the cost involved in getting wages from the bank.

6) Faulty MIS data: The increase in corruption and weakening accountability has roots in the excessive dependence of implementation of MNREGS on technology (real-time MIS being one of them). There is a growing pile of evidence on how real-time MIS has made MNREGS less transparent for workers, reduced accountability of frontline functionaries, and aided in the centralization of the programme.

7) Non-payment of unemployment allowance: There are a huge number of unemployment allowances being shown in the MIS currently. But inaction from the Central government in ensuring payments of the same has shown that the government wants to use the MIS as per its convenience and is not honouring its own database.

8) Genuine job cards being deleted to meet 100% DBT targets: Genuine job cards are being randomly deleted as there is a huge administrative pressure to meet 100 percent Direct Benefit Transfer (DBT) implementation targets in Mahatma Gandhi National Rural Employment Guarantee Act. In states like Jharkhand, there are multiple examples where the districts had later requested to resume job cards after civil society interventions into the matter. While the government has been boasting about Aadhar-based savings, the reality is that a huge number of genuine job cards and ration cards are getting deleted and genuine people have been deprived of their due entitlements.

9) Too much centralisation weakening local governance: A real-time MIS-based implementation and a centralised payment system have further left the representatives of the Panchayati Raj Institutions with no role in implementation, monitoring, and grievance redress of MGNREGA schemes. It has become a burden as they hardly have any power to resolve issues or make payments. The over-centralisation of the scheme has completely depoliticised the implementation of MNREGS and local accountabilities have been completely diminished.

10) Administration not honouring local priorities: Mahatma Gandhi National Rural Employment Guarantee Act could be a tool to establish decentralised governance. But, with the administration almost dictating its implementation, it is a burden for the people and especially for the local elected representatives. The governments always use the bottom-up people’s planning strategy to gain political mileage but never honour local priorities while implementing the schemes. Further linking MNREGS to the construction of Pradhan Mantri Awas Yojana (PMAY), individual household toilets, Anganwadi centres and rural ‘haats’ have been destroying the spirit of the programme, and gram sabhas and gram panchayats’ plans are never honoured. This is a blatant violation of the Act as well.

The government is relying heavily on the MIS to show that "All is well", while it should actually review its MIS system itself and correct the present gaps in implementation. The MIS data presently is not a true measure of performance in MNREGS as a MIS-based implementation, without a robust leakage control mechanism, can only give out faulty data and misguiding impression.

Recent News-

No money left in MGNREGA coffers of 21 states.

  • The Centre’s flagship rural employment scheme has run out of funds halfway through the financial year, and supplementary budgetary allocations will not come to the rescue for at least another month when the next Parliamentary session begins. According to its own financial statement, the Mahatma Gandhi National Rural Employment Guarantee Act scheme shows a negative net balance of? 8,686 crore.
  • This means that payments for MNREGS workers as well as material costs will be delayed unless the States dip into their own funds. Activists say the Centre is condemning workers to “forced labour” by delaying wage payments at a time of economic distress. However, the Centre is now accusing many States of “artificially creating demand” for work on the ground.
  • The MNREGS is a demand-driven scheme, guaranteeing 100 days of unskilled work to any rural household that wants it. During last year’s COVID-19 lockdown, the scheme was ultimately given its highest budget of ? 1.11 lakh crore.


To ensure effective rural development, all the glitches in the implementation of Mahatma Gandhi NREGA must be removed. It must be implemented as per demand with the proactive role by the Panchayat and GRAM Sabha. Allocation of funds from both centre and state must ensure timely payments for keeping up with the rural demand. MGNREGA emerged as a major shock absorber of COVID19 impacts on rural areas, thus has proved its critical role to solve rural problems particularly unemployment.

Source: The Hindu

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