The Mahatma Gandhi National Rural Employment Guarantee Act, 2005 (MGNREGA) was promulgated on 7 September 2005. The legal obligation is to guarantee at least 100 days of employment in the fiscal year to rural households with adult members volunteering to perform unskilled manual labour.
The law was introduced along with Mahatma Gandhi’s National Rural Employment Guarantee Scheme as part of an anti-poverty program that provides up to 100 days of unskilled manual labour per year on public projects. Its effective implementation has the potential to change the geography of poverty.
MGNREGA created the largest employment program in human history, unlike all other wage employment programs in scope, structure and focus. Its bottom-up, human-centric, demand-driven, self-selection, rights-based design is unique and unparalleled.
Table of Contents
What is Mahatma Gandhi National Rural Employment Guarantee Act
The National Rural Employment Guarantee Act (NREGA) was enacted on 25 August 2005 and was renamed the Mahatma Gandhi National Rural Employment Guarantee Act (MNREGA) in 2009.
MGNREGA provides a statutory guarantee to an adult member of a rural household willing to work in public service at the statutory minimum wage for her 100 days of employment each fiscal year.
The Government of India’s Rural Development Department (MRD) oversees the overall implementation of this program in collaboration with state governments.
The Act was notified in 200 counties in Phase 1, which took effect on 2 February 2006 and expanded to 130 districts in the 2007-08 fiscal year. 113 districts and 17 districts of the UP have been notified effective from 15 May 2007.
The remaining districts were notified under the NREGA effective 1 April 2008. NREGA covers the whole country except for districts with a 100% urban population.
Objectives of MGNREAGA
The Mahatma Gandhi National Rural Employment Guarantee Act came with the following objectives:-
- Its goal is to guarantee rural workers at least 100 days of unskilled manual labour each year to enable rural households to become self-sufficient.
- The primary purpose of the NREGA system is to ensure livelihoods for economically vulnerable segments of the population.
- Strengthen livelihoods and provide resources for the poor.
- NREGA also wants to involve vulnerable segments of society actively.
- The program also aims to strengthen Panchayati Raj operations across India.
Goals of MNREGA
MNREGA is social security legislation which came with the objective of promoting and welfare of poor and marginalised labourers. Let’s discuss the goals of MNREGA:-
- It provides strong social safety nets for vulnerable groups by providing alternative employment sources when other options are scarce or inadequate.
- It provides a growth engine for the sustainable development of the agricultural economy.
- It also aims to provide jobs in factories that address chronic causes of poverty, such as drought, deforestation and soil erosion.
- The Mahatma Gandhi National Rural Employment Guarantee Act aims to strengthen the natural resource base of rural livelihoods and create lasting assets in rural areas.
- It empowers the rural poor through rights-based legal processes.
- It aims to provide a new way of doing business as a governance reform model based on transparency and grassroots democracy principles.
- It promotes conditions for inclusive growth, from basic wage stability and rural economic revitalisation to transformative democratic empowerment processes.
Evaluation of the National Rural Employment Guarantee Act
An impact assessment of the project shows that the program is not working as designed and that many people who needed jobs are still out of work, especially in the poorest states where jobs are most required.
The team further explored the results in India’s poorest states, like Bihar and Jharkhand, to better understand why the program did not work as intended. Findings have helped local policymakers design new programs that improve local government’s ability to deliver better, more effective social protection programs.
Most of the assessments focus on Bihar, where more than 50% population is under the age of 25, and almost 90% of the population lives in rural areas. Researchers analysed household-level data from India’s national sample survey conducted in 2009-2010 to determine the program’s nationwide impact.
The data was also used to understand better the effectiveness of programs reaching out to the rural poor in India, especially backward castes, tribes and women. In Bihar, researchers used a randomised controlled study of awareness-raising activities to understand their impact on people’s understanding of and participation in work programs.
Researchers have found that across all states in India, a large number of people have been looking for work but have not found success through the programme.
It was even more pronounced in India’s poorest states, where the program is most needed. In Bihar, researchers found the program was well below target. As the researchers noted, the findings highlighted challenges affecting local governments.
The results have enabled the Government of Bihar to understand better the challenges it faces in providing social protection schemes. Policymakers used the findings to design a World Bank-backed Bihar social protection project.
The project will strengthen the Department of Social Welfare and the Department of Rural Development to provide better social protection programs and services to the poorest and most vulnerable citizens.
Salient Feature of the MNREGA
- Adults from rural households willing to do unskilled manual labour can apply for registration in writing or verbally at their local Gram Panchayat.
- Gram Panchayat will issue a job card after proper verification. Job cards feature family photos of all adults who wish to work under MGNREGA. It can be applied free of cost.
- Job cards must get issued within 15 days of application.
- Job card holders can submit a written application for seeking employment under the scheme to Gram Panchayat, mentioning the time and duration for which they seek employment. Minimum employment days must be at least 14 days.
- Employment will be provided within 15 days of application, failing which the state government will provide an unemployment benefit allowance daily.
- Employment should be provided within a radius of 5 km of the village. In case the jurisdiction extends the prescribed limit, then extra wages of 10% are payable to fulfil additional transportation and living expenses
- Wages have to be paid per compliance with the Minimum Wages Act 1948 for labourers in the State unless the Centre prescribes a wage rate (not be less than Rs. 60 per day).
- Men and women will get equal wages.
- Wages are to be paid as per piece rate or daily rate. Wage disbursement should be done weekly
- At least one-third of beneficiaries are women registered and requested work under the scheme.
- Gram Sabha will recommend, and the Zilla panchayat will approve the shelf of projects for a village.
- At least 50% of work will be allotted to be provided by the Gram Panchayats
- MGNREGA also aims to provide sustainable work, including water and soil conservation, land development, and afforestation works
- No contractors and machinery are allowed under this scheme.
- The Central Government bears the 100 per cent wage cost of unskilled manual labour and 75 per cent of the material cost, including the skilled and semi-skilled workers’ wages.
- The gram sabha is authorised to conduct a social audit from time to time.
- Grievance redressal mechanisms are to be provided to ensure an effective and solution-based implementation mechanism
- All accounts and records concerning the scheme should be available for public inspection
Even after 17 years of implementation of MGNREGA, workers struggle to get the work they want and sometimes, due to internal organisational corruption, they are not provided with the full wages.
Even after the government’s initiatives, there is very low public awareness of the scheme. This social security legislation faced issues in delivering its objectives like implementation complications, weak financial management and inadequate monitoring.
The Mahatma Gandhi National Rural Employment Guarantee Act aimed to reduce poverty and provide extra work to those who need it. Still, it became a source of corruption because of a lack of transparency, as said by our finance minister Nirmala Sivaraman.
The Act has continued to fight widespread corruption and administrative negligence for the last 17 years since its inception. Technology-based, centralised, faulty implementation has thrashed local accountabilities and increased leakages.
What is the two-stage process for wage disbursement under the MNREGA scheme?
Stage 1 is a set of processes until local authorised functionaries sign electronically generated pay orders.
In Stage 2, the Centre credits wages to accounts of workers
Who can apply for seeking employment under the MNREGA scheme?
All adult members of a rural household having an MNREGA job card are authorised to seek employment as unskilled manual labour.
Which section of the Mahatma Gandhi National Rural Employment Guarantee Act prescribes payment for payment of unemployment allowance?
Section 7 of the MNREGA Act.
Who is designated as a district programme coordinator?
The CEO of the gram panchayat, district collector, or any other officer of such rank can be appointed as a distinct programme coordinator under section 14 of the Act.
Is the gram sabha authorised to audit the works of the gram panchayat?
Yes, the gram sabha is authorised to audit the works of the gram panchayat as per section 17 of the Act.