Mahatma Gandhi National Rural Employment Guarantee Act (MNREGA)

The Objective

Mahatma Gandhi National Rural Employment Guarantee Act (MNREGA) came into force on February 02, 2006 with the aim of providing livelihood security, social protection and democratic growth, by ensuring at least one hundred days of guaranteed wage employment in a financial year, to each household whose adult members volunteer to undertake unskilled manual work.

The Act is the world's first law that guarantees wages in exchange for manual work on a scale unmatched anywhere. The Act has been implemented in three phases, where the first phase saw the launch in 200 of the poorest districts in the country. By 2007-08, another 130 districts had been included and by April 2008, all remaining districts had been included.

Mahatma Gandhi NREGA aims to build a productive asset base for the rural poor through wage employment and strengthen the livelihood opportunities for the marginalised and those living below the poverty line. The scheme is centric around community development and aims to enhance social inclusion by strengthening the Panchayati Raj institutions.

Important aspects of MNREGA

Funding pattern:

Central funding

The Centre shall bear the 100per cent cost of wages of unskilled workers, salary and allowances of the Programme Officers and all expenses of the Central Employment Guarantee Council. In addition, 75per cent of the material cost and wages of skilled and semi-skilled workers will also be borne by the central government.

State funding

Respective state governments will bear 100 per cent cost of the administrative expenses of the State Employment Guarantee Council. In cases where employment is not provided, the state government will bear the total cost of unemployment allowance payable. The state government will also bear its share of 25 per cent of the material cost, and wages of skilled and semi-skilled workers.

State Employment Guarantee Fund (SEGF)

All States except Goa and the Union Territories have constituted SEGF and have a dedicated account for MNREGA.

Worker Registration

Every adult of a household living in rural areas is entitled to 100 days of employment for unskilled manual work and may submit his or her personal details such as name, age and address, to the local Gram Panchayat. The unit for registration is a household.

Issuance of Job Card

After due process of verification of name, age and address, a Job Card is issued to every registered household, within 15 days of application. The Job Card serves as an identification document and is valid for five years and may be further renewed, after completing the due verification process.

Process of applying for work

Any individual with a Job Card can approach the Gram Panchayat, Ward Officer or any authorised representative of the state government, through written, oral method or through any call centre or website and seek employment. The Gram Panchayat, in turn is mandated to issue a receipt, which then guarantees employment within 15 days of application.

Unemployment Allowance

In cases where no employment has been provided within 15 days of applying for work, then the individual shall be compensated by a daily unemployment allowance, as per prescribed guidelines.

Public works related to natural resources management Works related to Water harvesting, water conservation and watershed management may be undertaken in addition to ground water regeneration through building of check dams, contour bunds, dykes, stop dams, etc. Regeneration of traditional water bodies through desilting etc may also be undertaken. All the above are aimed at improving drinking water availability, as well as meeting the local demand for irrigation and micro irrigation purposes to augment livelihood opportunities. Developing individual assets for vulnerable sections

Land owned by scheduled castes, scheduled tribes, other backward classes, nomadic tribes, physically challenged individuals, women-headed households, and families below the poverty line, is to get priority for works to develop the land.

Assisting the above through developing of wells, ponds and related water harvesting structures to support and augment agriculture, horticulture, sericulture and farm forestry on these lands are to be encouraged. Development of sheds etc to support poultry, livestock etc may also be undertaken. Where water bodies are available, fisheries may be promoted through development of storage facilities, fish drying yards, etc.

In cases where no housing is available, the unskilled wage component under various Central and state government sponsored schemes like the Indira Awaas Yojana, may also be undertaken.

Developing infrastructure for Self Help Groups

Self Help Groups are encouraged to build durable infrastructure for post-harvest produce storage and bio-fertilizers, along with other related assets, to enable better agricultural production and storage. Work sheds for common use by Self Help Groups can also be undertaken.

Improving rural infrastructure

Rural sanitation works including home toilets, school toilets and Anganwadi toilets are promoted. Solid and liquid water management is also covered under the programme.

Conversion of inner village roads to pucca roads and also those connecting to state highways, is also covered .

The programme aims to develop works for common use such as playgrounds, community halls, Gram Panchayat building, agriculture and foodgrain storage, village haat and crematoria.

Social audits and Public disclosure

All concurrent audits are done every month, while the Gram Panchayat is mandated to conduct an audit every six months. All related records and expenditure is open to public scrutiny, free of cost.

Grievance redressal mechanism

Grievance redressal mechanisms have been put in place at all levels for immediate response to any complaints and to ensure smooth works implementation.

Review of Performance under MNREGA

Budget outlay

In FY 06-07, the total budget outlay was Rs 11,300 crore, while in FY 13-14 (till Dec '13), the budget was Rs 33,000 crore.

Total works taken up

In FY 06-07, the total number of works taken up was 8.35 lakh, while the total number of works completed the same year was 3.87 lakh.

In FY 13-14 (till Dec '13), the total number of works taken up was 111.64 lakh, while the total number of works completed in the same year was 11.17 lakh.

Total Expenditure

In FY 06-07, the total expenditure against available funds was Rs 8,823.35 crore, while in FY 13-14 (till Dec '13), the total expenditure was Rs 24,848.75 crore.

On wages, in FY 06-07, the total expenditure was Rs 5,842.37 crore. In FY 13-14 (till Dec '13), the expenditure on wages was Rs 17,832.19 crore.

Job card issued:

In FY 06-07, the total number of job cards issued was 3.78 crore. In FY 13-14 (till Dec '13), 12.72 crore job cards had been issued.

Employment provided to households

In FY 06-07, 2.10 crore households had been provided employment, while in FY 13-14 (till Dec '13), the number was 3.81 crore.

Person days break-up

In FY 06-07, 90.5 crore person days of employment was provided. Of this, the scheduled castes comprised 25 per cent (22.95 crore), scheduled tribes were 36 per cent (32.98 crore), Women constituted 40 per cent (36.40 crore), and others consisted of 38 per cent (34.56 crore).

In FY 13-14 (till Dec '13), 134.80 crore person days of employment had been provided. Of this, scheduled castes comprised 23 per cent (31.53 crore), scheduled Tribes were 16 per cent (21.09 crore), Women accounted for 54 per cent (73.33 crore), and others comprised 61 per cent (82.18 crore).

Data for the year: FY 13-14

In FY 13-14, 220.34 crore person days of employment was generated with 7.39 crore individual workers being provided employment. The total number of households who got work was 4.79 crore.

Of this, women held a share of 52.8 per cent of the total person days. The SC/ST participation rate was 40.05 per cent, with SC standing at 22.65 per cent and ST holding 17.4 per cent share.

The total expenditure on wages has been Rs 26,687.78 crore, which represents almost 70 per cent of the total expenditure of Rs 38,742.62 crore.

The total number of works taken up in FY 14-15 stands at 111.64 lakh. Of this, 37.3% is allocated to rural sanitation, 15.8% per cent to rural connectivity, 14.0 per cent to drought proofing, 11.1 per cent to water conservation and harvesting, 7.2 per cent to land development, 5.1 per cent to micro-irrigation works, 3.1 per cent to renovation of traditional water bodies, 2.9 per cent to flood control, 2.5 per cent to other works, 0.4 per cent to Bharat Nirman Rajiv Gandhi Seva Kendra, and 0.1 per cent to fisheries.

Overall benefits of MNREGA since inception

Since the Mahatma Gandhi NREGA was launched, every year around 5 crore households, mostly in rural areas, find employment under the program. This represents almost one fourth of the total rural households in the country.

From the launch of the program till December '13, MNREGA has provided 1575 person days of employment and Rs 1,55,000 crore has been spent on wages, which represents 70 per cent of the total expenditure.

The benefit of the programme can be seen by the doubling of the average daily wage earned from Rs 65 per person day in FY 06-07 to Rs 124 in FY13-14.

MNREGA has resulted in increased food security in rural areas along with an increase in rural spending. A study conducted by a global research organisation found that rural spending had outpaced urban spending between FY 09-10 and FY 10-11. In several states, MNREGA has provided employment where no other means of earning was available and this resulted in lower distress migration to urban areas for seeking employment.

In addition to wages, impact assessment of MNREGA by various entities has shown that over 10 lakh households have benefitted from development of works on private land resulting in higher income, better crop intensity, shift to crops offering higher returns and an improvement in overall asset quality.

Financial inclusion through wage transfer to bank and post office accounts

Since inception, MNREGA has seen over 9.3 crore rural accounts being opened up in various banks and post offices, resulting in 80 per cent of the total wages being paid through these channels. This has resulted in greater financial inclusion and has significantly reduced the possibility of financial misappropriation by vested interests. Another benefit has been that the rural poor have been brought into the organised sector and now have access to credit facilities and other benefits of the banking sector.

Inclusive growth and women's participation

The largest beneficiaries of the Mahatma Gandhi NREGA have been the marginalised households belonging to scheduled castes, scheduled tribes and other Backward classes (OBCs). Between 40-60 per cent of the beneficiaries belong to these categories, many of whom were bonded labourers. MNREGA has provided them with an alternate means of employment, with dignity of labour.

A sample study conducted by the C&AG's office on 38,376 beneficiaries found that over 80 per cent of the beneficiaries belonged to the SC/ST and OBCs.

Another significant feature of the MNREGA has been the opportunity provided to women to find employment on an equitable and just basis. Since the launch of the scheme, the share of women participation has been between 40-51 per cent of the total person days generated. This is way above the mandatory minimum level of 33 per cent.

Given the fact that India has traditionally seen gender disparity when it came to wages, MNREGA has helped to bring about a gender parity on wages and significantly reduced gender-based discrimination.

Natural resource regeneration through sustainable development

53 per cent of the works executed under MNREGA has been focused on water and soil conservation. This has resulted in better options for sustainable living in rural areas through natural resource conservation and regeneration. Development of groundwater recharging, water harvesting, flood protection and drought proofing, have all resulted in improved soil condition, supporting changes in cropping patterns and resulting in higher yields. The above measures have also improved availability of drinking water for people and livestock.

Criticism of the implementation roll out of MNREGA

While there is no denying the broad benefits accrued to a large segment of economically weaker and marginalised people, the scheme has come under a lot of scrutiny and criticism with regard to corruption and misappropriation of funds.

Sample survey carried out in 2009 and 2011 by the National Sample Survey (NSS) have shown gaps between the number of days of MNREGA employment reported and the corresponding MNREGA database, which seems to suggest that the payments were made for work not done. Some reports seem to suggest that the leakage in the system could be as high as 20 per cent. While the government has been trying to plug the leakages, there is still a strong suspicion with regard to abuse of the scheme by vested interests .

With the new NDA government in place at the Centre, there is a strong case being made out to either shelve MNREGA altogether or at least restrict it to lesser area. There is pressure on the government to promote direct transfers instead of providing welfare support through indirect means.

The coming time will unveil the government's future strategy with regard to the world's largest social welfare programme.


Last Updated on : December 29, 2014