This article is written by Shreya Singh, from Gitarattan International Business School, IPU. In this article, she analyses the Mahatma Gandhi National Rural Employment Guarantee Act of 2005, in the State of Sikkim. 


Employment has always been a major concern for countries like India. In the year 2011, 21.9% of Indians were living below the poverty line (defined by the World Bank “extreme poverty” metric of $1.9 per day per head). However, when measured with the UNDP Multidimensional Poverty Index or MPI, India failed miserably with a whopping 55.3% population regarded as MPI poor. The bare necessities of life for any individual has always been roti, kapda aur makan which in English translates as; food, clothing and shelter. Individuals in search of labor sometimes migrate to urban areas, however going by the very fact that 70% of the Republic of Indian population continues to measure in rural areas itself indicates that India is really aforesaid to exist in villages solely. Thus the shortage of selections and opportunities of basic capability to participate effectively in exurban society are a few things not sensible.

The present article entails the impact of MGNREGA in Sikkim. At first, the scheme is discussed at the national level and then its performance in Sikkim is put under consideration.

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Since 1960, India has continued to brawl to find suitable employment schemes in its vast rural hinterland. Schemes like the Rural Manpower Programme, Crash Scheme for Rural Employment, etc. were enacted to provide work in rural areas. Ultimately, to link up employment generation, infrastructure development and food security in rural areas, the government integrated National Rural Employment Program (NREP) meant for community development and Rural Landless Employment Guarantee Programme (RLEGP) having a focus on landless households, into a new scheme that is Jawahar Rozgar Yojana (JRY) or Sampoorna Grameen Rozgar Yojana.

On 2 October 1993, the Employment Assurance Scheme (EAS) was initiated to employ those who have agricultural hands, to cope with the economic crises of that time caused by exogenous forces.

In January 2001, the Vajpayee government, to protect poor people against a reduction in their purchasing power capacity, introduced FWP (Food for Work Programme) resembling the one that was initiated back in 1977. And soon due to implementation issues it merged with the Mahatma Gandhi NREGA in 2006.

MGNREGA : a brief

The Mahatma Gandhi National Rural Employment Guarantee Act, 2005 (MGNREGA) was notified on September 7, 2005. The mandate of the Act is to provide at least 100 days of guaranteed wage employment in a financial year to every rural household whose adult members volunteer to do unskilled manual work.

It was passed in September 2005, came into force on February 2, 2006 and was renamed from NREGA to MGNREGA in 2009. Ever since it has been one of the far-reaching work guarantee programmes in the world till now. It’s an unprecedented move that is especially people-oriented, demand-driven and has a rights-based structure.

The ‘Right To Work’ which is embodied under Article 41 of the Constitution directs the state to secure to all its citizens their right to work. Under the Employment Guarantee Act (EGA) a person has the right to 100 days of employment in a year, for each family within 5 km of their residence within 15 days from the application on a local development project. It provides a legal guarantee for 100 days of employment in every financial year to the adult member of any rural household. Moreover, every rural household also has the right to get itself registered under MGNREGA.

MGNREGA remains crucial for improving the purchasing power primarily in semi or unskilled work of rural people living below the poverty line in rural India.

It’s an Act augmented to provide for the enhancement of livelihood security of the households in rural areas of the country and has been praised by the government as the most ambitious public work programme in human history. MGNREGA spreads to the whole of a country except to the districts that have a hundred percent urban population.

The Ministry of Rural Development (MRD), Government of India is monitoring the entire implementation in association with the state governments whereby the state government has to incorporate all features of MGNREGA in their respective Mahatma Gandhi Rural Employment Guarantee Scheme (MGNREGS).


  1. Employment generation and social security in India;
  2. Creation of durable assets such as pawns roads and canals in rural areas;
  3. Reducing rural-urban migration and fostering social equity.


To be able to claim any benefit under MGNREGA one must:

  1. Be a citizen of India;
  2. Be a job seeker who has completed 18 years of age at the time of application;
  3. Applicants must be a part of a local household (I.e. the application must be made with the local gram panchayat);
  4. Applicants must volunteer for unskilled labour.

Salient visual of MGNREGA

  1. Bottom-up, people-centred, demand-driven, self-selecting and right based employment scheme;
  2. Each state has its own version of the Rural Employment Guarantee Scheme;
  3. One-third of stipulated beneficiaries must be women workforce;
  4. Self targeting and no pick and choose, whoever is in need will get the work within 15 days;
  5. Labour and material in work undertaken must be in the ratio of 60:40 percent and eminence of panchayat in work selection;
  6. Direct payments to bank accounts of beneficiaries, public information, social audit by gram sabha and audit by CAG;
  7. Funding: to be shared between state and Central government;
  8. The RTI Act, 2005 shall be applicable to ensure transparency and accountability.

Is ‘Right to work’ a fundamental right?

The Universal Declaration of Human Rights and International Covenant on Economic, Social and Cultural Rights recognises the right to work in employment of one’s choice and it is the state’s responsibility to safeguard this right.

Article 41 of the Indian Constitution says, “The state shall within the limit of its economic capacity and development, make effective provision for securing the right to work..”

Directive Principles of State Policy (DPSP) being unenforceable in nature insinuate that no person can sue the state for not providing him with a job. But if any person is deprived of their right to livelihood except according to just and fair procedure established by law, they can challenge the deprivation as offending the right to life conferred by Article 21.

Olga Tellis vs Bombay Municipal Corporation 1985

In this case, an interpretation of Article 21 was made by the Hon’ble Supreme Court whereby ‘right to livelihood’ was recognised as a fundamental right inherent in the ‘right to life’ under Article 21.

MGNREGA and the right to work

Under the MGNREGA scheme if a job cardholder is not given any job within 15 days they can claim compensation which is a fraction of the wage rate.

MGNREGA : in Sikkim

The MGNREGA was implemented in Sikkim in February 2006. It’s an initiative of the Central government to manifest the rights of individuals like the right to work and to act as a means to protect and promote livelihood security in rural India. It was introduced in North Sikkim in phase-1 of the implementation scheme nationwide, it was implemented in East and South Sikkim in phase-2 and west district in phase-3. As of 5 October 2021, about 0.88 (in lakhs) job cards have been issued for the financial year 2021-2022. The state received three national awards from the Central Government in 2011 for excellence achieved in the implementation of the scheme. One of the key observations in the field visit was that the earnings through MGNREGA are higher than the earnings through primary occupation for most of the villagers. This has turned out to be one of the most positive outcome schemes.

The uniqueness of MGNREGA in Sikkim

‘Afno Gaun, Afai Banaun’ (let’s build our village ourselves) was a slogan given by the Chief Minister of the state to popularise the scheme and in return asking for large-scale participation by the villagers. A structure has been established by the Sikkim government whereby 100 per cent implementation of the MGNREGA programme to the gram panchayat units had been undertaken. The state had been able to bring all four districts and their respective Gram Panchayat Units (GPUs) under the confines of MGNREGA.

Getting to know about individuals’ backgrounds, about half of rural families have women as their main breadwinners and almost all families have their self-owned lands. 

Unlike other states, Sikkim has a right-based ‘self-selection’ approach relying on the initiative of households’ demand-driven strengths—providing need-led resources to states and regions within states. More than 70 per cent of sites/projects have been in accordance with consultation with the community.

The financial inclusion plan is rolled out in the entire state whereby Sikkim has been able to indulge vigorously in managing payments escorted by the nationalised bank.

The MGNREGA Act requires that priority be given to women so that at least one-third of the beneficiaries are among them. It won’t be wrong if we call it ‘a women-centric scheme’ by looking at the percentage of women participation generated, sometimes exceeding 50%. Unlike other schemes we have had till now, this seems to be remarkably different as it seeks to provide employment at fair and equal wage rates.

Types of works

Para 4(1), Schedule I of Mahatma Gandhi NREGA embraces all the permissible types of works. According to this, MGNREGA works have been amalgamated into agriculture and allied activities. Categorising it we can put it into four distinct areas of study;

Category A : Public Works Relating to NRM (Natural Resources Management)

More recently, NRM has been an important part of MGNREGA in assuring sustainable livelihoods among the poor. 

Land development works in common land, watershed management, micro and minor irrigation works, water conservation and water harvesting are a few basic structures formulated to help households in increasing the level of income by improving the productivity of land and also through diversifying to income sources. Furthermore, it includes afforestation, tree plantation and horticulture providing the right to usufruct to the households (covered under paragraph 5 of Schedule I).

This provision has turned out to be beneficial for improving the livelihoods of people and not just like another employment scheme for transferring payments.

Category B : Assets Development

These types of work are concerned with community and individual asset development. 

Giving moral or intellectual benefit by ameliorating productivity of lands of households (as specified in paragraph 5) via land development and proffer fundamentals for irrigation. It aims at improving livelihoods through horticulture, sericulture, plantation, and other farm activities. Moreover, it takes into consideration various components of the unskilled wage for construction of houses sanctioned under the Awaas Yojana or other State or Central Government schemes. It also augments the promotion of fisheries and livestock.

Category C : Common Infrastructure for NRLM Compliant Self-Help Groups (SHGs)

It’s a flagship of the government aiming to provide self-employment and skilled wage employment opportunities to rural poor.

It promotes agricultural productivity by providing for bio-fertilisers and post-harvest facilities and the establishment of a common workshed for activities of SHGs.

Category D : Rural Infrastructure

From work-related infrastructure to rural sanitation, it can be related to building toilets for individual households, Anganwadi units, etc. with an aim to be defecation free per se. It furthermore extends to provide rural road connectivity, construction of playfields and adopting a research-based set of action for unpredictable potential disasters.

Improvement in result

MGNREGA for so many past years had played a significant role in uplifting the lives of rural individual households and economically empowering all women. Nearly, about 94270 number of individual and 371 joint bank accounts have been opened during 2017-2018 under the scheme. 

Sikkim has traditionally been an egalitarian society when compared to other Indian states yet a large part of beneficiaries seemed to be women. Another heartening fact can be seen whereby women labourers seem to be receiving wages in person and not relying on others as their proxies, shows that women have come out to be mentally strong and that they can also be independent breadwinners for their families. Moreover, it had appreciated and tried to promote women at the discussion in gram sabha and also with rural development department officials.

The wage rate under MGNREGA is fixed at ₹ 207.48 which is not much but has acted as a benediction in a situation of the miserable plight of women. 

It continues to hold the principle of equal treatment by providing the same wages to both classes of people and not discriminating against anyone based on gender. Additionally, MGNREGA has led to individual and society asset development, providing intellectual benefits by bringing productivity out of the land. It has also brought back the solemnity of workers and has increased their bargaining power as beneficiaries. Moreover, one can come and form SHGs and avail various government schemes like Swarnjayanti Gram Swarozgar Yojana, etc.

Major findings

The usefulness and sustainability of MGNREGA in Sikkim as presented in Table 1 shows that in terms of representation of various people in the domain of physical progress, the total Person Days generated for Scheduled Castes has amounted to 4.96% and for Scheduled Tribes 42.07% respectively with women Person days out of total amounting to 51.27%. Contending to program-specific realization, the active job cards issued to migrant labourers and employed workers under the scheme equate to 86.14% with NRM expenditure of 77.42% to promote sustainable livelihoods for the poor via the creation of natural resource assets for both public and individual. For ameliorating the productivity of lands under category B work and construction of common infrastructure with expenditure on agriculture and agriculture allied works adding up to 50.04% and 67.09% respectively. 

                                     Table 1: Physical Progress FY 2021-22

Key Parameter IndicatorsValue
Approved Labour Budget₹ 40,00,000
Person days Generated so far19,46,149
SC person-days % as of total person-days4.96%
ST person-days % as of total person-days42.07%
Women Persondays out of Total(%)51.27%

                              Table 2: Program Specific  FY 2021-22

Key Parameter IndicatorsValue
Total No. of Job Cards issued87,840
Total No. of Workers1,43,116
Total No. of Active Workers97,246
% of NRM Exp.(Public Individual)77.42%
% of CategoryB  Works50.04%

                                 Table 3: Progress Report FY 2020-21

Approved Labour Budget[In Lakhs]Person days generated so far[In Lakhs]% of Total LBAverage days of employment provided per HouseholdAverage Wage rate per day per person(Rs.)Total Households Worked[In Lakhs]Total Individuals Worked[In Lakhs]Total No of HHs completed 100 Days of Wage Employment

So far as the awareness level of the program is concerned, it is indeed high. Recently, MGNREGA Entitlement Awareness Week was conducted nationally as a part of Azadi Ka Amrit Mahotsav, whereby officials in Sikkim reached out to MGNREGA workers to make them aware of their rights and entitlements under the Act. It is revitalizing to know that though MGNREGA has been a successful milestone in achieving a low migration rate in rural areas earlier, this year’s result has not been as much when compared to previous ones. Moreover, respondents mostly seemed to be marginal farmers with the main source of income coming from the agriculture sector. 

Honouring MGNREGA

Concerning the Impact Assessment of MGNREGA in Sikkim, it was observed that invariably the performance achieved has been a decent juxtaposition to set targets. As per official data maintained by the Department of Rural Development, Ministry of Rural Development, Govt. of India, the target set for providing housing to the rural poor under Pradhan Mantri Gramin Awas Yojana in sikkim was 1,339 forth which 1,188 beneficiaries were registered for whom the foundation were prepared to provide the financial facilities further aiding in administering higher quality for their living. 

Moreover, with the vision to run for rural development via the creation of institutional platforms like SHGs, federated institutions have come to 180 (households mobilized into SHGs) with the number of SHGs promoted to 21. 

With the holistic development( personal, human, economic, social) of Gram Panchayats(GPs) under Sansad Adarsh Gram Yojana (SAGY) instilling values among villages and keeping the soul of rural India alive, the government was able to identify a total of 9 GPs having 391 planned activities under Village Development Plans and uploaded on SAGY portal. MGNREGA was able to honour its commitment to bridging the Rural-Urban divide by recognising urban clusters with 3 Integrated Cluster Plans (ICAP) prepared and approved under the Shyama Prasad Mukherji Rurban Mission.

Impacts of MGNREGA

In Sikkim, an impact of MGNREGA is noticeable, besides emerging as a viable option for the unemployed it has uplifted the quality of life of rural poor there. The vision and mission of the government of Sikkim to strengthen governmental jurisdiction below the level of state and bring about a positive change in rural Sikkim has been nothing short of exemplary. This year women person-days achieved a total of 51.27%, promoting women’s sense of self-worth and their ability to determine their own choices. The income generation and economic self-reliance (of the poor) pioneered through MGNREGA was further augmented towards their children in meeting their basic rights to health, food and education. MGNREGA by supplementing rural people’s income with an assured minimum wage rate of MGNREGA work that is  Rs. 213.71 for the year 2021-22 will help in axing poverty, giving people of Sikkim an improved standard of living.

MGNREGA and Human Development Indicator (HDI)

Not economic growth alone but the capabilities of humans should be considered before assessing the development of a country. HDI is the summary measure in the dimensions of human development. The 2015 report of the United Nations Development Programme has called the National Rural Employment Guarantee Act (MGNREGA) a milestone in human development.

As per the report, “Evaluations have found that job creation accelerated from less than 1 billion working days among 20 million households in the Act’s first year of operation, 2006-07, to 2.5 billion among 50 million households in 2010-11.”

The report further adds that India’s GDP is estimated to increase by 0.02–0.03 per cent, labour income would rise about 700 million rupees and that the welfare of the poorest households would increase up to 8 per cent. People belonging to Scheduled Tribes or Scheduled Castes would also benefit.

It’s arduous to study the aftermath of MGNREGA on HDI. But going by evidence shows the impact on four major ingredients of HDI, Income Generation, Economic self-reliance (of the poor), Women’s empowerment including gender mainstreaming and Quality of life.

No gender discrimination in MGNREGA 

MGNREGA was launched to provide employment to the unemployed and to render them various livelihood security measures. It was not explicitly mentioned for the promotion of any specific class. It has rather encouraged gender equality, the same being not the goal of the Act in any way. 

Unlike minimum wages, under MGNREGA both classes of people are provided with equal wages. The wage rates for workers under the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA), 2005 are notified and revised annually based on Consumer Price Index-Agricultural Labourers (CPI-AL) by the Central government following the provisions of Section 6(1) of the Mahatma Gandhi NREGA.

For the payment of wages, the methodology of a piece-rate basis is fostered. There is a specified schedule of rates depending on which the work output is defined and further used for the calculation of wages for MGNREGA beneficiaries. 


MGNREGA, a legislation of the kind India has never witnessed before. The drafting of the Bill by the UPA government where the essential clause guaranteed the rural poor with promised employment was a landmark in every way. The implementation of the program was not just drafted for any specific class of people but rather included women, backward castes and tribes as beneficiaries. The act has turned out to be a success in Sikkim and has been hailed lately by the Central government for being able to bring back the dignity of workers and re-established the concept of a welfare state. It has also geared up the social relationship among the folks which is prima facie required for establishing a strong society. Moreover, MGNREGA represents grass-roots democracy where we are talking about public participation and it’s something, not just a mere economic measure but also a social and political empowerment tool. It has fostered inclusive growth ranging from wage security to recharging the rural economy towards a transformative empowerment process of democracy.

The scheme has no doubt often been used as a vote bank by the UPA government for being the creator of the scheme. Equivalent to which the present NDA government came out with numerous programs aiming towards low-income groups such as Jan Dhan Yojana, Atal Pension Yojana, Skill India Program, Garib Kalyan Yojana, Prime Minister Awas Yojana and many other schemes. It’s not like MGNREGA is a complete flop but no initiative has been taken to link it with other schemes which are the same in principle and doing individually good. 



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