National Rural Employment Guarantee Act 2005 (or, NREGA No 42, later renamed as the
"Mahatma Gandhi National Rural Employment Guarantee Act", MGNREGA), is an Indian
labour lawand social security measure that aims to guarantee the 'right to work'.This act was
passed in September 2005
National Rural Employment Guarantee
Act, 2005
First page of Sambhram National Rural Employment
Guarantee Act
Parliament of India
Enacted by Parliament of India
Introduced Raghuvansh Prasad Singh, Minister
by of Rural Development
Keywords
MGNREGA, NREGA
Status: In force
Mahatma Gandhi National Rural
Employment Guarantee Act, MGNREGA
Mission "It aims to enhance livelihood security
statement in rural areas by providing at least 100
days of wage employment in a financial
year to every household whose adult
members volunteer to do unskilled
manual work"
Country India
Launched 2 Feb 2006
Status In force
It aims to enhance livelihood security in rural areas by providing at least 100 days of wage
employment in a financial year to every household whose adult members volunteer to do
unskilled manual work.[1][2]
The act was first proposed in 1991 by P.V. Narasimha Rao.[3] It was finally accepted in the
parliament and commenced implementation in 625 districts of India. Based on this pilot
experience, NREGA was scoped up to cover all the districts of India from 1 April 2008.[4] The
statute is hailed by the government as "the largest and most ambitious social security and public
works programme in the world".[5] In its World Development Report 2014, the World Bank
termed it a "stellar example of rural development".[6]
The MGNREGA was initiated with the objective of "enhancing livelihood security in rural areas
by providing at least 100 days of guaranteed wage employment in a financial year, to every
household whose adult members volunteer to do unskilled manual work".[7] Another aim of
MGNREGA is to create durable assets (such as roads, canals, ponds and wells). Employment is
to be provided within 5 km of an applicant's residence, and minimum wages are to be paid. If
work is not provided within 15 days of applying, applicants are entitled to an unemployment
allowance. Thus, employment under MGNREGA is a legal entitlement.
MGNREGA is to be implemented mainly by gram panchayats (GPs). The involvement of
contractors is banned.[citation needed] Labour-intensive tasks like creating infrastructure for water
harvesting, drought relief and flood control are preferred.[citation needed]
Apart from providing economic security and creating rural assets, NREGA can help
in protecting the environment, empowering rural women, reducing rural-urban
migration and fostering social equity, among others."[8]
The law provides many safeguards to promote its effective management and implementation.
The act explicitly mentions the principles and agencies for implementation, list of allowed
works, financing pattern, monitoring and evaluation, and most importantly the detailed
measures to ensure transparency and accountability.[citation needed]
History Edit
From 1960, the first 30 years of experimentation with employment schemes in rural areas taught few
important lessons to the government like the ‘Rural Manpower Programme’ taught the lesson of
financial management, the ‘Crash Scheme for Rural Employment’ of planning for outcomes, a ‘Pilot
Intensive Rural Employment Programme’ of labour-intensive works, the ‘Drought Prone Area
Programme’ of integrated rural development, ‘Marginal Farmers and Agricultural Labourers Scheme’ of
rural economic development, the ‘Food for Work Programme’ (FWP) of holistic development and better
coordination with the states, the ‘National Rural Employment Programme’ (NREP) of community
development, and the ‘Rural Landless Employment Guarantee Programme’ of focus on landless
households.[9] The Planning Commission later approved the scheme and the same was adopted on
national scale.[10]
On 1 April 1989, to converge employment generation, infrastructure development and food security in
rural areas, the government integrated NREP and RLEGP[n 1] into a new scheme JRY. The most
significant change was the decentralization of implementation by involving local people through PRIs
and hence a decreasing role of bureaucracy.[12]
On 2 October 1993, the Employment Assurance Scheme (EAS) was initiated by the then prime minister
P.V.Narasimha Rao to provide employment to agricultural hands during the lean agricultural season. Rao
had started discussions on this act in 1991.[13] The role of PRIs was reinforced with the local self-
government at the district level called the ‘Zilla Parishad’ as the main implementing authority. Later, EAS
was merged with SGRY in 2001.[14]
On 1 April 1999, the JRY was revamped and renamed to JGSY with a similar objective. The role of PRIs
was further reinforced with the local self-government at the village level called the ‘Village Panchayats’
as the sole implementing authority. In 2001, it was merged with SGRY.[15][16]
In January 2001, the government introduced FWP(Food for Work Programme) similar to the one
initiated in 1977. Once NREGA was enacted, the two were merged in 2006.[17]
On 25 September 2001 to converge employment generation, infrastructure development and food
security in rural areas, the government integrated EAS and JGSY into a new scheme SGRY. The role of
PRIs was retained with the ‘Village Panchayats’ as the sole implementing authority.[18] Yet again due to
implementation issues, it was merged with Mahatma Gandhi NREGA in 2006.[19]
The total government allocation to these precursors of Mahatma Gandhi NREGA had been about three-
quarters of ₹1 trillion (US$14 billion).[20]
Overview Edit
According to the Eleventh Five Year Plan (2007–12), the number of Indians living on less than $1 a day,
called Below Poverty Line (BPL), was 300 million that barely declined over the last three decades ranging
from 1973 to 2004, although their proportion in the total population decreased from 36 per cent (1993–
94) to 28 percent (2004–05),[21] and the rural working class dependent on agriculture was unemployed
for nearly 3 months per year.[22]
The uco Government had planned to increase the number of working days from 100 to 150 before the
2014 Lok Sabha Elections in the country but failed.[23]
The NDA government has decided to provide 150 days for rain hit areas.[24]
The registration process involves an application to the Gram Panchayat and issue of job cards. The wage
employment must be provided within 15 days of the date of application. The work entitlement of ‘120
days per household per year’ may be shared between different adult members of the same
household.[25]
The law also lists permissible works: water conservation and water harvesting; drought proofing
including afforestation; irrigation works; restoration of traditional water bodies; land development;
flood control; rural connectivity; and works notified by the government. The Act sets a minimum limit to
the wage-material ratio as 60:40. The provision of accredited engineers, worksite facilities and a weekly
report on worksites is also mandated by the Act.[26]
Furthermore, the Act sets a minimum limit to the wages, to be paid with gender equality, either on a
time-rate basis or on a piece-rate basis. The states are required to evolve a set of norms for the
measurement of works and schedule of rates. Unemployment allowance must be paid if the work is not
provided within the statutory limit of 15 days.[27]
The law stipulates Gram Panchayats to have a single bank account for NREGA works which shall be
subjected to public scrutiny. To promote transparency and accountability, the act mandates ‘monthly
squaring of accounts’.[28] To ensure public accountability through public vigilance, the NREGA
designates ‘social audits’ as key to its implementation.[29]
The most detailed part of the Act (chapter 10 and 11) deals with transparency and accountability that
lays out role of the state, the public vigilance and, above all, the social audits.[30]
For evaluation of outcomes, the law also requires management of data and maintenance of records, like
registers related to employment, job cards, assets, muster rolls and complaints, by the implementing
agencies at the village, block and state level.[31]
The legislation specifies the role of the state in ensuring transparency and accountability through
upholding the right to information and disclosing information proactively, preparation of annual reports
by CEGC for Parliament and SEGCs for state legislatures, undertaking mandatory financial audit by each
district along with physical audit, taking action on audit reports, developing a Citizen's Charter,
establishing vigilance and monitoring committees, and developing grievance redressal system.[32]
The Act recommends establishment of ‘Technical Resource Support Groups’ at district, state and central
level and active use of Information Technology, like creation of a ‘Monitoring and Information System
(MIS)’ and a NREGA website, to assure quality in implementation of NREGA through technical
support.[33]
The law allows convergence of NREGA with other programmes. As NREGA intends to create ‘additional’
employment, the convergence should not affect employment provided by other programmes.[34]
The law and the Constitution of India Edit
The Constitution of India – India's fundamental and supreme law.
The Act aims to follow the Directive Principles of State Policy enunciated in Part IV of the Constitution of
India. The law by providing a 'right to work' is consistent with Article 41 that directs the State to secure
to all citizens the right to work.[35] The statute also seeks to protect the environment through rural
works[36] which is consistent with Article 48A that directs the State to protect the environment.[37]
In accordance with the Article 21 of the Constitution of India that guarantees the right to life with
dignity to every citizen of India, this act imparts dignity to the rural people through an assurance of
livelihood security.[38] The Fundamental Right enshrined in Article 16 of the Constitution of India
guarantees equality of opportunity in matters of public employment and prevents the State from
discriminating against anyone in matters of employment on the grounds only of religion, race, caste,
sex, descent, place of birth, place of residence or any of them.[39] NREGA also follows Article 46 that
requires the State to promote the interests of and work for the economic uplift of the scheduled castes
and scheduled tribes and protect them from discrimination and exploitation.[40]
Article 40 mandates the State to organise village panchayats and endow them with such powers and
authority as may be necessary to enable them to function as units of self-government.[41] Conferring
the primary responsibility of implementation on Gram Panchayats, the Act adheres to this constitutional
principle. Also the process of decentralization initiated by 73rd Amendment to the Constitution of India
that granted a constitutional status to the Panchayats[42] is further reinforced by the Mahatma Gandhi
NREGA that endowed these rural self-government institutions with authority to implement the law.[43]
Independent Academic ResearchEdit
Academic research has focused on many dimensions of the NREGA: economic security, self-
targeting, women's empowerment, asset creation, corruption, how the scheme impacts
agricultural wages. An early overall assessment in the north India states suggested that NREGA
was "making a difference to the lives of the rural poor, slowly but surely." [44]
The evidence on self-targeting suggests that works though there is a lot of unmet demand for
work.[45][46]
One of the objectives of NREGA was to improve the bargaining power of labour who often
faced exploitative market conditions. Several studies have found that agricultural wages have
increased significantly, especially for women since the inception of the scheme.[47][48][49]This
indicates that overall wage levels have increased due to the act, however, further research
highlights that the key benefit of the scheme lies in the reduction of wage volatility.[50] This
highlights that NREGA may be an effective insurance scheme. Ongoing research efforts try to
evaluate the overall welfare effects of the scheme; a particular focus has been to understand
whether the scheme has reduced migration into urban centers for casual work.[51]
Women employed under NREGA for de-silting a tank
Another important aspect of NREGA is the potential for women's empowerment by providing
them opportunities for paid work. One third of all employment is reserved for women, there is a
provision for equal wages to men and women, provision for child care facilities at the worksite -
these are three important provisions for women in the Act.[52]More recent studies have suggested
that women's participation has remained high, though there are inter-state variations.[53] One
study in border villages of Rajasthan, Madhya Pradesh and Gujarat studied the effect on short
term migration and child welfare.[54] and found that among children who do not migrate, grade
completed is higher. The same study found that demand for NREGA work is higher, even though
migrant wages are higher.[55]
Over the last decade it has been observed that more than half the NREGA funds have been spent
on water related projects. This was very much needed because water bodies have been shrinking
especially in rural India. India became a water deficient nation 5 years ago and every year since
then the water level has been shrinking. Though over Rs 20,000 crores under MGNREGA has
been spent each year during the last decade on developing rural water bodies, wells, aquifers,
catchment areas they were not permanent assets.
On asset creation, there have not been too many detailed studies. A few focusing on the potential
for asset creation under NREGA suggest that (a) the potential is substantial and (b) in some
places it is being realized and (c) lack of staff, especially technical staff rather than lack of
material are to blame for poor realization of this potential.[56][57] Others have pointed out that
water harvesting and soil conservation works promoted through NREGA "could have high
positive results on environment security and biodiversity and environment conservation"[58] A
study conducted by researchers at the Indian Institute of Science and other collaborators
attempts to quantify the environmental and socio-economic benefits of works done through the
NREGA [59]
Corruption in government programmes has remained a serious concern, and NREGA has been
no exception. According to recent estimates, wage corruption in NREGA has declined from
about 50% in 2007-8 to between 4-30% in 2009-10.[60] Much of this improvement is attributable
to the move to pay NREGA wages through bank and post office accounts.[61] Some of the
success in battling corruption can also be attributed to the strong provisions for community
monitoring.[62] Others find that "the overall social audit effects on reducing easy-to-detect
malpractices was mostly absent".[63]
A few papers also study the link between electoral gains and implementation of NREGA. One
studies the effect in Andhra Pradesh - the authors find that "while politics may influence
programme expenditure in some places and to a small extent, this is not universally true and does
not undermine the effective targeting and good work of the scheme at large." [64]The two other
studies focus on these links in Rajasthan [65] and West Bengal.[66] Several local case studies are
also being conducted to identify the regional impacts of NREGA.[67]
Views of the critics of MGNREGAEdit
The critics claim that the scheme leads to wastefulness and contributes to fiscal deficit of the
Government of India. Critics argue that employment should be seen as a privilege rather than a
right.
Views of the proponents of MGNREGAEdit
Proponents of the scheme enumerate number of benefits. For example, Rejaul Karim Laskar, an
ideologue of the Congress party- the largest constituent of the UPA Government which
introduced the scheme, claims that the scheme has multifarious benefits including "reduction in
poverty, reduction in migration, women empowerment, improvement of productivity of
agricultural land and regeneration of water resources".[91]
Save MGNREGAEdit
'Save MGNREGA' is a set of demands proposed during the joint meeting of the national
leadership of CITU, AIAWU, AIDWA and AIKS in New Delhi. The agenda was to discuss the
dilution of MGNREGA scheme by the new government. Following demands were proposed:[92]
1. Government of India should increase the Central allocation for the scheme so that number of
workdays can be increased to 200 and per day wage can be increased to Rs. 300.
2. Job card to be issued for everyone who demands job, failing which, after 15 days employment
benefits should be given.
3. Minimum 150 days of work should be ensured to all card holders
4. Minimum wage act should be strictly implemented. Delay in wage payment should be
resolved.
5. MGNREGA should be extended to urban areas.
6. Gram Sabhas should be strengthened to monitor proper implementation of the scheme and
also to check corruption.
New Amendments Proposed in 2014Edit
Learn more
This section needs to be updated.
Union Rural Development Minister, Nitin Gadkari, proposed to limit MGNREGA programmes
within tribal and poor areas. He also proposed to change the labour: material ratio from 60:40 to
51:49. As per the new proposal, the programme will be implemented in 2,500 backward blocks
coming under Intensive Participatory Planning Exercise.[citation needed] These blocks are identified
per the Planning Commission Estimate of 2013 and a Backwardness Index prepared by Planning
Commission using 2011 census. This backwardness index consists of following five parameters -
percentage of households primarily depended on agriculture, female literacy rates, households
without access to electricity, households without access to drinking water and sanitation within
the premises and households without access to banking facilities.[93]
Both proposals came in for sharp criticism. A number of economists with diverse views opposed
the idea of restricting or "focussing" implementation in a few districts or blocks.[94][95][96]
In the November 2014 cabinet expansion, Birender Singh replaced Nitin Gadkari as rural
development minister. Among the first statements made by the new minister was an assurance
that NREGA would continue in all districts. Around the same time, however, NREGA budget
saw a sharp cut [97] and in the name of 'focusing' on a few blocks the programme has been
limited to those blocks.[98]
New Amendments Proposed in 2017Edit
Finance Minister Arun Jaitleyannounced Rs. 48,000 crore to be allocated to the MGNREGA as a
part of 2017 Union budget of India.[99][100]
Controversies and criticismsEdit
A major criticism of the MGNREGA is that a lot of money disbursed by the government gets
siphoned off by middlemen, thus leaving a number of MGNREGA workers either with
unpaid wages or less than standard wages. In Mahuadand, Jharkhand, most of the people
who had worked under the MGNREGA did not get paid, while some either got paid less than
stipulated or were given 5 kg of rice by private contractors instead.[102]
Another criticism of NREGA is that it is making agriculture less profitable. Landholders
often oppose it on these grounds. The big farmer's point of view can be summed up as
follows: landless labourers are lazy and they don't want to work on farms as they can get
money without doing anything at NREGA worksites; farmers may have to sell their land,
thereby laying foundation for the corporate farming.[citation needed]
Economists like Jagdish Bhagwati and Arvind Panagariya have described NREGA as “an
inefficient instrument of shifting income to the poor” – the general notion being that it
takes five rupees to transfer one rupee to NREGA workers. Economists including Surjit
Bhalla have termed it as unsuccessful suggesting that schemes such as the NREGA need to
be junked, saying that any scheme with 85 percent leakages can't be proclaimed to be
“working successfully”.[103]
The workers points of view can be summed up as: labourers do not get more than Rs. 80 in
the private agricultural labour market, there is no farm work for several months; few old
age people who are jobless for at least 8 months a year; when farm work is available they
go there first; farmers employ only young and strong persons to work in their farms and
reject the others and hence many go jobless most of the time.[citation needed]
CorruptionEdit
NREGA has been criticised for leakages and corruption implementation. It has been alleged
that individuals have received benefits and work payments for work that they have not
done, or have done only on paper, or are not poor. But with the introduction of the Direct
Beneficiary Transfer (DBT) system introduced by the NDA - II government, wherein, the
workers get their payment directly into the bank account, the chances of corruption has
gone down to great extent.
Furthermore, Shri Arun Jaitley has committed that the central government would spend
INR 6000 crores into the scheme in order to provide an impetus to the scheme.
Although [104] in 2014-15, only 28% of the payments were made on time to workers.
Following the allegations of corruption in the scheme, NDA government ordered a re-
evaluation of the scheme in 2015[2] and a budget allocation of ₹60,000 crore has been set
aside for MNREGA in Interim Budget for 2019-2020.
