This article is written by Anjali S. Fad, an L.L.M. student at the Department of Law, University of Mumbai. This article provides a brief overview of MGNREGA including its objectives, features, and shortcomings.

This article has been published by Sneha Mahawar.

Introduction

The National Rural Employment Generation Act, 2005 later renamed the Mahatma Gandhi National Rural Employment Guarantee Act or MGNREGA in 2009, is an Indian law and social security measure aimed at guaranteeing the “right to work”. This law was passed on August 23, 2005, under the UPA government of Prime Minister Manmohan Singh after Minister of Rural Development Raghuvansh Prasad Singh presented the bill to Parliament. It applies to all of India except for districts that have a 100% urban population. The goal is to improve livelihoods in rural areas by providing at least 100 days of paid employment in a financial year to at least one member of each household whose adult members volunteer to do unskilled manual work. Women are guaranteed one-third of the jobs available under MGNREGA.

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Another goal of MGNREGA is to create sustainable assets (such as roads, canals, ponds, and wells). The employment must be within 5 km of the applicant’s place of residence and the minimum wage must be paid. If no work is provided within 15 days of the application being submitted, the beneficiaries are entitled to an unemployment allowance. In other words, if the state does not provide employment, it must provide certain unemployment benefits to these people. Employment according to MGNREGA is, therefore, a legal right. In addition to economic security and rural asset building, other elements that are believed to benefit NREGA are that they can help protect the environment, empower rural women, reduce rural-urban migration and promote equity.

The law was first proposed by P.V. Narasimha Rao in 1991. It was eventually adopted by Parliament and implemented in 625 districts of India. Based on this pilot experience, the NREGA was expanded to all districts in India from April 1, 2008. The government hailed the law as “the most comprehensive and ambitious social security and public works system in the world.” In 2009, the World Bank censured the law and others for undermining development through policies that restrict internal movement. However, in its 2014 World Development Report, the World Bank called it “an excellent example of rural development”. The MGNREGA is mainly conducted by the Gram Panchayats (GPs). The law notes that it offers many safeguards to encourage its effective administration and implementation. The law specifically mentions the implementing principles and authorities, the list of approved works, the model for funding, monitoring, and evaluation, and detailed measures to ensure transparency and accountability.

Objectives of Mahatma Gandhi National Rural Employment Guarantee Act

  • MGNREGA is a powerful tool to ensure inclusive growth in rural India through its impact on social protection, livelihood security, and democratic empowerment. The specific objectives are;
  • Social protection for the most vulnerable people living in rural areas of India by providing employment opportunities.
  • Livelihoods for the poor through the creation of sustainable assets, improved water security, and soil.
  • Maintaining and increasing soil productivity.
  • Empowerment of socially disadvantaged people, especially women, Scheduled Castes (SC) and Scheduled Tribes (ST), through rights-based legislative processes.
  • Strengthening of decentralised and participatory planning through the convergence of different poverty alleviation and livelihood initiatives.
  • Deepening local democracy by strengthening Panchayati Raj institutions. 
  •  Strengthening transparency and accountability in governance.

Features of Mahatma Gandhi National Rural Employment Guarantee Act

Registration

  • Provides a legal guarantee of paid employment for adult members of rural households who agree to perform unskilled manual labour for a maximum of 100 days per household.
  • Applicable to all district villages.
  • Every rural household has the right to register with MGNREGA

Job card

  • Job cards are issued to each household registered under MGNREGA
  • Job cards are issued within 15 days of receipt of the application for job card registration

Application for work

  • Registered job card holders can seek employment by making a group/individual application
  • At least 10 job seekers must apply to be approved for new employment under MGNREGA
  • Employment is provided by sanctioning one of the works under the “Shelf of Works” as identified and prioritised by the village community within 15 days of receiving job applications within the MGNREGA
  • The Municipality has the right to select works from 8 categories of approved works
  • The village community will establish a 5-year “Shelf of Works” to be carried out in their villages based on needs and approved man-days.
  • The works proposed by the community of the municipality cannot be modified by anyone unless they do not comply with the guidelines of the MGNREGA

Provision and execution of works

  • The works will be carried out within 5 km of the village’s jurisdiction
  • If the work provided is more than 5 km away, job seekers receive 10% of the minimum wage as an additional amount

Unemployment insurance

  • The state government pays 25% of the minimum wage for the first 30 days as a compensatory daily unemployment benefit for being out of work to families applying for work under the MGNREG Act and half the wage for the rest of the year

Wages and other facilities

  • Wages are paid according to the state minimum wage rate set under the 1948 Minimum Wage Act. 
  • According to revised wages, 21 states had an increase of less than 5% and 10 states had an increase of more than 5%.
  • However, there have not been any changes in wage rates in Manipur, Mizoram, and Tripura.
  • The highest increase is recorded in Goa, at 7.14%
  • and the lowest increase of 1.77% in Meghalaya.
  • Equal pay for men and women
  • 1/3 of the beneficiaries must be women
  • Wages to be paid within a fortnight
  • Amenities such as creche (child care), drinking water, and shade should be provided in the workplace.
  • A 60:40 wage and material ratio must be maintained for all work performed under NREGA.
  • No contractors or machines are allowed 

Grievance redressal

  • A grievance mechanism will be put in place to ensure a responsive implementation process.

Social audit

  • Social audit is essential to all work carried out under the MNREGA.

Public disclosure

  • The provisions of the Right to Information Act,2005 are applied in letter and spirit to ensure transparency and accountability.
  • All accounts and records relating to the scheme must be made available to the public and to any person who desires a copy of those records upon request and payment of a specified fee.

An overview of Mahatma Gandhi National Rural Employment Guarantee Act

  • The main purpose of the MGNREGA is to provide guaranteed wage employment in a fiscal year to every household in rural areas whose adult members volunteer to do unskilled manual work for at least 100 days.
  • The main objectives of MGNREGA are :
    • To provide at least 100 days of unskilled manual work as guaranteed in a fiscal year to every rural household, resulting in the creation of productive assets of specified standard and imperishability.
    • To strengthen the livelihoods of the poor.
    • To proactively ensure social inclusion.
    • To institutionally strengthen the Panchayati Raj.
  • The goals of MGNREGA are :
    • Social protection of the most vulnerable people living in rural areas of India through guaranteed wage employment opportunities.
    • Improving the livelihoods of the poor rural population through the creation of wage employment opportunities at work leads to the creation of sustainable assets.
    • Rejuvenation of the natural resource base of rural areas.
    • Creation of a sustainable and productive rural wealth base.
    • Empowerment of socially deprived individuals, especially women, Scheduled Castes (SC) and Scheduled Tribes (ST), through rights-based legislative processes.
    • Strengthening of decentralised and participatory planning through the convergence of different anti-poverty and livelihood initiatives.
    • Deepening grass-roots democracy by strengthening the institutions of the Panchayati Raj.
  • MGNREGA was passed by the Indian Parliament on August 23, 2005.
  • MGNREGA was notified on September 7, 2005 through the Gazette of India and it came into force on February 2, 2006.
  • An amendment to the National Rural Employment Guarantee Act was made to change the nomenclature of the Act from NREGA to MGNREGA on 2nd October 2009.
  • MGNREGA was implemented in the first phase in February 2006 in 200 districts and later expanded to 113 and 17 additional districts. The remaining districts were included in the Act on April 1st, 2008. Currently, the Act is applied in 644 districts in the country with a large rural population.
  • According to Section 29 of the MGNREGA, if the Central Government is satisfied that it is necessary to make an amendment to the schedules of MGNREGA, Central Government may by notification amend Schedule I or Schedule II, as the case may be.
  • According to Section 32 (1) of the MGNREGA, the State Government may by notification make rules for effective implementation to carry out the provisions of the Act subject to the conditions of consistency with MGNREGA and rules made by the Central Government.
    • The Central Government may delegate powers (excluding the power to make rules) for implementation to state governments or subordinate officers by notification, and state governments can delegate the powers to subordinates (Section 26).
  • Key stakeholders of MGNREGA are:
    • Wage seekers
    • Gram Sabha (GS)
    • Three Tier Panchayati Raj Institutions (PRI)
    • Block Level Program Officer
    • District Program Coordinator (DPC)
    • State Government
    • Ministry of Rural Development (MoRD)
    • Civil Society
    • Other stakeholders [i.e., operations departments, convergence departments, self-help groups]
  • Rights and entitlements of wage seekers in MGNREGA are:
    • An application for registration.
    • Obtaining a Job Card (JC).
    • Applying for employment and receiving a dated receipt of the request.
    • Choosing the time and duration of the work applied for.
    • Obtaining work within 15 days of the request or from the date the work is sought in the case of advance application, whichever is later.
    • Amenities such as creche (child care), drinking water, shade, first aid, etc. should be provided on the worksite.
    • Eligible for a 10% wage supplement if employed beyond a 5 km radius.
    • Right to inspect their Muster Rolls (MR) and receive all the employment information registered on their Job card.
    • According to Section 3(3) MGNREGA, workers are entitled to a weekly wage, and in any case within fifteen days of the execution of the work.
    • Entitlement to unemployment benefits if employment is not provided within fifteen days of the application or from the date the work is sought in the case of an advance application, whichever is later.
    • Right to compensation for delay in the amount of 0.05% of the unpaid wages per day beyond the 16th day of the closure of muster roll.
    • Medical treatment for injuries sustained during employment, including hospital expenses if applicable, and ex gratia benefit in the event of disability or death in the course of employment.
  • Rights and responsibilities of the Gram Sabha in MGNREGA:
    • It determines the order of priority of business at Gram Sabha meetings with consideration of the potential of the local area, its needs, and local resources (paragraph 4 (2), Schedule I)
    • Monitor the execution of the work within the Gram Panchayat.
    • It is the main forum for conducting social audits. It provides a platform for all residents to seek and get all relevant information from all carriers, including in connection with the MGNREGA work carried out in the Gram Panchayat area.
  • Activities for which Gram Panchayat (GP) is responsible are:
    • Receiving Registration Requests.
    • Review of Registration Requests.
    • Household registering.
    • Issue of job cards (JC).
    • Receiving applications for job/work.
    • Issuing dated receipts for these work requests.
    • The assignment of work must be completed within fifteen days of the submission of the application documents or from the date on which in the case of an advance request, whichever is later, regardless of the request agency
    • Conduct regular surveys to assess demand for work.
    • Identification and planning of works, preparation of specifications, including the determination of the order of priority. Forward the list of works to the program officer for review and preliminary evaluation.
    • Carry out work according to the technical standards and necessary measures.
    • Maintain records in accordance with MGNREGA Operational Guidelines 2013
    • Maintain accounts and provide certificates of use in formats prescribed by the Central/state government.
    • Prepare an annual report with facts, figures, and achievements related to the implementation of the scheme in your jurisdiction and a copy of it must be provided to the public upon request and upon payment of the fees specified in the scheme.
    • Generation of awareness and social mobilisation in the rural areas.
    • Convening the Gram Sabha for planning and social audit.
    • Provide all relevant documents, including muster rolls, invoices, receipts, measurements, books, copies of sanction orders, and other books and records related to the Gram Sabha for the purpose of conducting a social audit.
    • Monitoring of implementation at the village level.
    • Proactive disclosure: Details of completed and ongoing work (including wages paid and material components) in the workplaces and the names of the people (with JC numbers) who have work performed, days worked and wages paid, quantity and price of each material purchased project with the name of the agency that provides the equipment and other prominent places.
    • Provide all the information specified in the system audit standards to the social audit unit.
    • Organising events like Rozgar Diwas at the Gram Panchayat level once a month in each district.
  • Executive agencies such as Tehsildar/Block Development Officer are often located at the block level and referred to as the Program Officer. For blocks that have a high concentration of SC/ST/landless workers, they are likely to have greater demand for MGNREGA work and must have a firm/dedicated Program Officer for MGNREGA. The Program Officer should not be given any responsibilities that are not directly related to MGNREGA.
  • The state government appoints a DPC who may be the executive director of the District Panchayat (DP), the District Collector (DC), or other district-level officer of appropriate rank. According to the information provided, the DPC is responsible for the implementation of the system in the district with the provisions of the MGNREGA 2005 and the rules and guidelines issued under it.
  • The State Employment Guarantee Council has the following functions and responsibilities:
    • Advising State Government (SG) on the implementation of the program.
    • Review oversight and redress mechanisms and propose improvements.
    • Evaluation and monitoring of the program within the state.
    • According to Paragraph 4 (IV) (ix) of Schedule I of the MGNREGA, recommend working proposals for submission to the Central Government (CG).
    • Promote the widest possible spread of information about the MGNREGA and its regulations. 
    • Preparation of the annual report for the state governments for submission to the state legislature.
  • The powers/responsibilities of the state governments are:
    • Frame provisions on state responsibilities under Section 32 of the Act.
    • Development and publicity of the National Program for Safeguarding Rural Employment.
    • Setup the SEGC.
    • Establishment of a Mahatma Gandhi National Rural Employment Guarantee Act implementation agency at the state level with a sufficient number of high-calibre professionals
    • Establish a state-level Social Audit Office/Directorate of the MGNREGS with a sufficient number of people with knowledge of MGNREGA processes and a demonstrated commitment to social audits.
    • Establishment and administration of a State Employment Guarantee Fund (SEGF).
    • Ensure that the government share of the MREGGS budget is planned and approved by SEGF at the beginning of the year so it can be used as working capital.
    • Ensure that dedicated full-time staff is available for implementation if required by MGNREGA, specifically Employment Guarantee Assistant (Gram Rozgar Sahayak), PO, and staff at state, district, cluster, and GP levels.
    • Delegate financial and administrative authority to the DPC and program officer, as deemed necessary for the effective implementation of the program.
    • Establishment of a network of professional agencies for training, technical support, and quality control measures.
    • Periodic review, collection, monitoring, and evaluation of MGNREGA processes and outcomes.
    • Ensure accountability and transparency of the scheme at all levels.
    • Raise as much awareness as possible about MGNREGA across the state.
    • Ensure that civil society organisations involved in mobilising MGNREGA workers are able to meet at least once a month in a formal setting with state, district, and block officials.
    • Ensure compliance with all processes provided by laws, regulations, and policies.
  • Roles and responsibilities of the Ministry of Rural Development are:
    • Frame provisions of the Act.
    • Issue operational guidelines for the effective implementation of the Act.
    • Review of the List of Permitted Works under MGNREGA in response to the request of the state governments.
    • Establishment of the Central Employment Guarantee Council and organisation of council meetings.
    • Establishment and operation of the National Employment Guarantee Fund.
    • Establishment of the National Management Team (NMT) within the Department of Rural Development to perform functions at the national level within the framework of MGNREGA.
    • Make budget allocation and ensure timely release of central share.
    • Maintaining and operating an MIS to collect and track data on critical aspects of implementation and evaluate resource usage through a set of performance indicators.
    • Supporting and facilitating the use of information technology (IT) to increase efficiency and transparency in the enforcement of the Act.
    • Facilitate technical support and capacity building to improve outcomes.
    • Support innovations that contribute to the improvement of processes to achieve the goals and objectives of the Act.
    • Monitoring, evaluating, and conducting surveys on the performance of MGNREGA.
    • Panel agencies that can be used by state governments as PIAs to implement the work of MGNREGA and determine the percentage of funding that can be granted to cover administrative costs
  • Role of Civil Society Organisations (CSOs) and Self-help Groups (SHGs) in MGNREGA:
    • CSOs working at the local level can play a very important role in raising awareness among wage seekers and in supporting the capacity-building of GPs and state governments in planning, implementation, and social audit of MGNREGA. 
    • Self-help groups (SHGs) can play a direct role in spreading awareness, organising work, ensuring access to rights, assisting with door-to-door surveys, and guaranteeing social responsibility. The MGNREGA operating guidelines provide the framework for the participation of CSOs and support for the operationalization of the CFT project in convergence with NRLM.
  • Other stakeholders in MGNREGA:
    • Other key stakeholders are – Members of the Social Audit, Monitoring and Control Unit Bodies, technical staff of implementing agencies, and departments with which an MoU has been signed for convergence with MGNREGA, namely the Ministry of Agriculture, Ministry of Forests and Environment, Ministry of Water Resources, Directorate of Rural Development, Directorate of Land Resources, and Ministry of Drinking Water and Sanitation and departments that will benefit from MGNREGA such as agriculture, water resources/irrigation, forests, etc.
  • Gram Panchayat Development Plan under MGNREGA:
    • According to Section 16 (3) and (4) of the MGNREG Act, each Gram Panchayat must draw up a development plan and maintain a work shelf to meet employment needs. A development plan is a yearly work plan that includes a shelf of projects with administrative and technical approvals for each village. 
    • The development plan is an ongoing plan as the approved shelf of the project may carry forward according to the useful life of the project from one financial year to the next.
  • District Perspective Plan under MGNREGA:
    • A District Perspective Plan will be developed for five years, which will identify needs and gaps in the districts in all the sectors. The District Perspective Plan is a multi-year plan for various departmental projects.
    • District Perspective Plans should be made in such a way that they can be subdivided into different annual plans.
  • Types of works carried out under MGNREGA:

Paragraph 4, Schedule I provides for the work under MGNREGA

Category A: Public works related to the management of natural resources-

  • Water protection and harvesting structures to expand and improve groundwater, such as underground dams, earth dams, stop dams, and check dams with special emphasis on recharging groundwater, including drinking water sources;
  • Watershed management activities such as contour trenches, terracing, contour bunds, boulder controls, gabion structures, and spring shed development lead to a comprehensive treatment of a watershed;
  • Micro and small-scale irrigation works and construction, renovation, and maintenance of irrigation canals and drains;
  • Restoration of traditional water bodies, including removal of sediment from irrigation reservoirs and other water bodies;
  • Afforestation, tree planting, and horticulture in common and forest land, road margins, canal bunds, tank foreshores, and coastal belts that properly grant usufruct rights to households fall under paragraph 5; and
  • Land development works on common land.

Category B: Individual assets for vulnerable sectors (only for households that fall under paragraph 5 of Schedule I)-

  • Improving the land productivity of the households referred to in paragraph 5 through land development and providing adequate infrastructure for irrigation, including dug wells, agricultural ponds, and other water harvesting structures;
  • Improving livelihoods through horticulture, sericulture, plantations, and agricultural forestry;
  • Development of vacant or undeveloped residential land in accordance with paragraph 5 of Schedule I to bring it under cultivation;
  • Wage component for unskilled workers in housing approved by Indira Awaas Yojana or any other state or central government plan;
  • Creation of infrastructure for livestock farming, e.g. poultry houses, goat houses, pig houses stables, cattle houses, and fodder troughs for livestock; and
  • Creation of infrastructure to promote fisheries, e.g. fish drying yards, storage facilities, and promoting fishing in seasonal waters on public lands

Category C: Common infrastructure for NRLM-compliant support (self-help)  groups-

  • Work to promote agricultural productivity by creating the necessary sustainable infrastructure of bio-fertilizers and post-harvest facilities, including Pucca storage facilities (Pucca housing – designed to be solid and permanent) for agricultural use; and
  • Common work sheds for livelihood self-help group activities.

Category D: Rural infrastructure-

  • Works related to sanitation on rural lands, such as individual household latrines, school toilets, and ‘Anganwadi’ toilets, either independently or in convergence with other government programs to achieve the status of “open defecation free” and disposal of solid and liquid waste according to prescribed standards;
  • Provide all-weather rural road connectivity to identified unconnected and connected villages and rural manufacturing centers to the existing Pucca road network; and construction of roads or streets within the Pucca, including lateral drains and culverts within a town, village;
  • Construction of playgrounds;
  • Work to improve disaster preparedness or road restoration or restoration of other essential public infrastructure, including flood protection and control works, providing for drainage in flooded areas, deepening and repair of flood channels, and construction of stormwater drains for coastal protection;
  • Construction of buildings for Gram Panchayats, the establishment of women’s self-help groups, Cyclone Temporary shelters, Anganwadi centres, village shepherds, and crematoria at village or block level;
  • Construction of food grain storage structures to implement the National Food Safety Act 2013 (20 of 2013);
  • Manufacture of building materials is required for construction work under the Act.
  • Preservation of rural public property created under the law.
  • Any other work which may be declared by the Central Government in consultation with the state government in this sense.
  • Negative works under MGNREGA

Negative works include works not included in the list of permitted works and works that are not tangible, not measurable, not quantifiable, or repetitive in nature, e.g., removing grass, stones/pebbles.

  • List of negative works
    • Work that is not tangible, not measurable, not quantifiable, or repeated like removing grass, rocks, and farms, will not be allowed.
    • Works such as applying mud, removing shrubs or stones, and similar activities are not included as stand-alone activities. However, these can be part of the project tasks to convert uncultivable land into cultivable land.
    • Agricultural inputs and operations are not permitted. Removal of weeds and watering can only be considered for forestry plantations and horticulture for a period of 2-3 years. This should also be part of the consolidated project to be supported by MGNREGA.
    • Expenses incurred to fund unauthorised activities will be reimbursed by the individual responsible for such costs.
    • Pilot activities within the framework of MGNREGA are discouraged. Pilots using MGNREGA funds, which concern only a few panchayats, can only be accessed with the approval of the ministry.
    • MGNREGA funds cannot be used for land acquisition.
    • Specified criteria to be considered when executing dug wells under MGNREGA.
  • Special category of workers (vulnerable groups) under MGNREGA

The special categories of workers are:

  • People with disabilities
  • Primitive tribal groups
  • Nomadic tribal groups
  • Denotified tribes
  • Women in special circumstances
  • Persons over 65 years of age
  • People with HIV positive
  • Internally displaced people
  • Rehabilitated bonded labour
  • Disabled persons under MGNREGA

Persons with disabilities are defined under the Persons with Disabilities (Equal Opportunities, Protection of Rights and Full Participation) Act, 1995 (1 of 1996) as persons with disabilities with a severity of 40% or more who would be considered a special category of people for the purpose of MGNREGA.

  • Specific works identified for people with disabilities within MGNREGA

Many works are marked exclusively for people with disabilities. In addition, suggestive works are provided for the category of people with disabilities.

Some of the works are:

  • Drinking water systems;
  • Irrigation of the newly built wall with water;
  • Construction of embankments on the farm;
  • Childcare;
  • Planting;
  • The method used to arrive at the estimate of the Labour Budget (LB) 
    • The estimate of the LB under MGNREGA is based on the total cost (i.e., labor, material, and administrative costs) required to create paid jobs per person per day. The expenditure per person per day for the creation of wage employment will have wage and material costs in the ratio of 60:40. For example, if the project cost is 100 rupees, the minimum salary cost is 60 rupees and the maximum material cost is 40 rupees. Additionally, a maximum of Rupees 6 can be used for administrative expenses beyond wage and material expenses.
  • Procedure for approving the budget
    • The LB must be submitted to the Government of India by December 31 of each year for the following financial year. Rural development secretaries of the state should ensure that budgets for all districts in their state are submitted in a timely manner to avoid delays in the release of funds. In doing so, it is important that the states or districts meet the deadlines prescribed in the MGNREGA operational guidelines. Labour budgets received online are reviewed by the Ministry and any issues are reported to the State for clarification/review. States will respond to the issues raised so the budget approval process can begin. An approved committee, chaired by the Secretary of the Department for Rural Development, will assess and approve each state’s specific budget in consultation with the Secretaries of State responsible for rural development. The authorised committee decides on the person-days to be sanctioned according to the expected employment generation.
  • The approved budget can be revised
    • The budget is an estimate and MGNREGA is a demand-driven program, states/UTs may request the department to review their existing budget based on actual performance at any time of the year. The procedure prescribed for the creation of the budget also applies to the creation of the revised budget.

Shortcomings of Mahatma Gandhi National Rural Employment Guarantee Act

  • A decade after the enactment of the Mahatma Gandhi National Rural Employment Guarantee Act, the rural economy has suffered from declining employment, budget caps, wage delays, widespread workers’ rights violations, the lack of a strong grievance system, weak financial institutions, a severe shortage of officials and the indiscriminate use of technology. However, some current state government and civil society initiatives are opening up new opportunities to improve the program.
  • The MGNREGA has been in crisis for a number of years. Rural workers are finding it increasingly difficult to find work and be paid on time. Most of them are also deprived of their other legal rights, such as workplace facilities, unemployment benefits (if work is not delivered on time), and late payment compensation.
  • MGNREGA is slowly dying despite strong government claims of “record allocations” and 92% on-time payment generation. The central government issued a press release stating that 92% of MGNREGA payments this fiscal year were generated on time.

10 reasons why Mahatma Gandhi National Rural Employment Guarantee Act is failing 

Ridiculously low wage rates

  • Currently, MGNREGA wage rates in 17 states are lower than the corresponding state minimum wages. Various decisions have ruled that the MGNREGA wage rate cannot be lower than the state agricultural minimum wage. Ridiculously low wage rates have resulted in workers’ lack of interest in working for MGNREGA programs, and contractors and intermediaries taking control on the ground level.

Inadequate budget allocation

  • The success of MGNREGA at the local level depends on an adequate and uninterrupted flow of funds to the states. Three times in the past year and once this year, state funds have dried up due to a lack of the central government’s “mother sanctions” that hamper peak-season work. Almost every year, more than 80% of the funds are used in the first six months. Therefore, the government’s claim of a “record allocation” is not true in real terms. On the contrary, it has fallen because last year’s unpaid debts are also included in the current budget. In addition, the allocation of funds is not sufficient to ensure proper implementation on the ground.

Regular late payments

  • The Union Ministry of Rural Development accounts for wages paid after the second signatory signs the FTO (Funds Transfer Order). However, there are also delays in processing signed FTOs for which the Management Information System (MIS) does not calculate compensation. Despite the Supreme Court decision and initiatives and government order, provisions have not yet been made in the MIS for calculating full salary arrears and paying compensation for the same. The government claims that 92% of payments are generated on time is incorrect. Even a quick field investigation shows that payments are regularly late.

Workers penalised for administrative errors

  • The Department withholds wages from workers who fail to meet administrative requirements by the deadline, e.g., submission of the previous year’s audited fund statements, utilisation and bank reconciliation certificates, etc. There is no logical or legal explanation for this strange arrangement, that is why workers should be penalised for administrative errors.

The banking headache

  • Rural banks have a severe lack of staff and infrastructure and are therefore always very crowded. Workers typically have to visit banks more than once to withdraw their wages. Due to the high rush and poor infrastructure, bank books are not updated in many cases. Often workers don’t get their wages when they need them.

Faulty MIS data

  • Increased corruption and weakened accountability are rooted in the MGNREGA implementation’s over-reliance on technology (real-time GIS is one of them). There is mounting evidence of how real-time MIS has made MGNREGA less transparent to workers, reduced accountability for frontline officials, and helped centralise the program. It is necessary to think about delinking the implementation of the MGNREGA from the real-time MIS. Data can be uploaded to the MIS post-implementation. It can still be a transaction-based MIS.

Non-Payment of unemployment benefits 

  • A large number of unemployment benefits are currently shown in the MIS. But the Central Government’s inaction to guarantee its payments shows that the government wants to use the MIS as it pleases and does not respect its own database. It raises the question, why would an MIS based on real-time transactions be needed if it is not used to defend the provisions of the Act and improve enforcement processes? 

Real job cards are removed to achieve 100% DBT targets

  • Real job cards are randomly removed due to the enormous administrative pressure to achieve 100% implementation targets for Direct Benefit Transfer (DBT) in MGNREGA. In states such as Jharkhand, there are several examples where districts later requested the reinstatement of job cards following civil society intervention on the matter. While the government is boasting about Aadhar-based savings, the reality is that large numbers of genuine job and ration cards are being removed, and real people have been deprived of their due rights.

Too much centralization weakens local governance

  • An implementation based on a real-time MIS and a centralised payment system left the representatives of the Panchayati Raj institutions with literally no role in the implementation, monitoring, and resolution of MGNREGA schemes. It has become a liability as they have little power to resolve issues or make payments. The excessive centralization of the scheme has completely depoliticised the implementation of MGNREGA and local responsibilities have completely declined.

An administration that does not respect local priorities

  • MGNREGA could be a tool to establish decentralised governance. But since the administration hardly dictates its implementation, it is now literally a burden on the people and especially on the elected local representatives. Governments always use a bottom-up people’s planning strategy to gain political advantage but never respect local priorities when implementing schemes. MGNREGA’s continued involvement in the construction of Pradhan Mantri Awas Yojana (PMAY), individual household toilets, Anganwadi centres, and rural “Haats” has destroyed the spirit of the program, and the plans of the Gram-Sabhas and Gram-Panchayats are never followed through. It’s also a flagrant violation of the law.

Conclusion

The MGNREGA is a milestone in the history of social security legislation in post-independence India. Passed after a successful fight for employment guarantee legislation, it is a partial victory toward full-fledged employment rights in every developing country’s context. The key feature of this legislation that distinguishes it from all other public service provisioning schemes is its adoption by the Indian Parliament.

This legislation sparked a quiet revolution in the country’s rural areas. The MGNREGA Act puts the role of the state as a provider of livelihood within the reach of the beneficiaries themselves. By its very nature, it differs from any employment generation program undertaken to date. It requires a different approach to employment generation plans and the overall involvement of the state in granting the right to employment to its beneficiaries.

Frequently asked questions

What are the main objectives of MGNREGA?

Providing at least 100 days of the unskilled manual as guaranteed employment in a fiscal year to every household in rural areas on demand, resulting in the creation of productive assets of prescribed quality and durability, strengthening the livelihoods of the poor; proactively ensuring social inclusion and, institutional strengthening of the Panchayati Raj.

What are the main goals of MGNREGA?

Social protection of the most vulnerable people living in rural areas of India through guaranteed wage employment opportunities, Improving the livelihoods of the poor rural population through the creation of wage employment opportunities at work that leads to the creation of sustainable assets, rejuvenation of the natural resource base of rural areas, creation of a sustainable and productive rural wealth base, empowerment of socially disadvantaged people, especially women, Scheduled Castes (SC) and Scheduled Tribes (ST), through rights-based legislative processes, strengthening of decentralised and participatory planning through the convergence of different anti-poverty and livelihood initiatives, deepening grass-roots democracy by strengthening the institutions of the Panchayati Raj.

Is MGNREGA restricted to particular states or districts?

No, MGNREGA is implemented by all the country’s rural districts. MGNREGA was implemented in the first phase from February 2006 in 200 districts and later expanded to 113 and 17 additional districts, effective from April 1, 2007, and May 15, 2007, respectively. The remaining districts were included in the Act on April 1st, 2008. Currently, the Act is applied in 644 districts in the country with a large rural population.

Can the state government make rules for the effective implementation of MGNREGA?

The State Government may by notification make rules for effective implementation to carry out the provisions of the Act subject to the conditions of consistency with MGNREGA and rules made by the Central Government [Section 32(1)].

What types of work is carried out under MGNREGA?

Paragraph 4, Schedule I provides for the types of work carried out under MGNREGA:

  • Category: A: Public works related to the management of natural resources, 
  • Category B: Individual assets for vulnerable sectors (only for households that fall under paragraph 5 of Schedule I), 
  • Category C: Common infrastructure for NRLM-compliant support (self-help) groups, and
  • Category D: Rural infrastructure.

References

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