MGNREGA :- Mahatma Gandhi National Rural Employment Guarantee Act

Indian Government said: “Let there be work”! That wasn’t literally said but that was the idea behind the implementation of MGNREGA which was formerly known as NREGA. MGNREGA stands for Mahatma Gandhi National Rural Employment Guarantee Act. The part ‘Mahatma Gandhi’ was added later and initially it was just National Rural Employment Guarantee Act.

What is MGNREGA and when was it implemented?

The government was nice enough to recognize that every rural citizen have a right to employment. It was recognized that every person in rural India has the constitutional right to at least 100 days of work in a financial year. However, this right holds true only and only if he or she is actually willing to work. This means that if a person want to willingly stay unemployed, there is nothing government or anyone else can do anything about that.

With this being recognized, the government said:

Fine! We will guarantee 100 days of employment on a wage-based model to every rural household in every financial year provided, people need to volunteer in and are very much willing to do unskilled labor jobs.

This is what MGNREGA is! It guarantees 100 days of wage-employment.

But the question is, why did the government say that people need to volunteer?

Glad you asked! We mentioned earlier that people should be willing to work. If they want to stay unemployed, they are more than welcome to do so and no one will take any responsibility for those people. Now, if the government forces everyone to get employed under MGNREGA, there will be no way to understand who is willing to work and who is not! Only those who volunteer are the ones who are willing to work even if the work requires no skills.

What else did the government say?

The government also said that if it fails to provide guaranteed 100 days of work (even unskilled labor jobs) to those who volunteer in, government will pay unemployment allowances to them. Anyone who willingly stays unemployed will not be eligible for unemployment allowances.

What is a wage-based model?

It is a model of work where every worker is paid a certain predefined amount of money on work-day basis. There is no monthly salary. A person will work for a certain number of hours in a day and at the end of the day, he or she will be paid for the labor he or she provided. There are several factors that are used for calculating the daily wage. Some of them include:

• Number of hours of work.
• Difficulty level of the work.
• Daily sustenance cost according to recent economic conditions.

There are many other factors that pitch in while calculating daily wage but discussing them in details is beyond the scope of this article.

So, when was MGNREGA implemented?

The MGNREGA Act was implemented in September 2005 and all states in India were informed about the same.

MGNREGA in details

Now that we have a fairly good idea of what MGNREGA stands for, let us dive deeper and learn some details about the Act.

The primary objective of MGNREGA was designed for increasing livelihood security of Indian rural areas through:

• 100 days of wage-employment guarantee.
• Such employment opportunities to be provided in every fiscal year.
• Only willing adults from rural households will be provided with employment. ‘Adults’ refer to people in household over the age of 18 year.
• Willing adults should be open for unskilled manual or labor work.
• Willing adults need to apply for employment under MGNREGA.
• Government will provide employment within 15 days from the date of application.
• If government fails to provide work within promised timeframe, applicants will receive unemployment allowances.
• Every applicant will be provided work within 5 kilometers of the address of his/her residence.
• Minimum wages will be paid to employed people for 100 days.

Though government promises to pay unemployment allowances in case no work can be provided within stipulated timeframe, the State Governments have the authority to withhold the allowance payments under following circumstances:

• The applicant doesn’t show up during the employment period.
• The applicant or the adult family members of the applicant have received 100 days of work in a financial year (even if the employment was not at stretch).
• The applicant has already earned enough (through unemployment allowances and wages) which is equal to the total wage for 100 days in a given financial year.

MGNREGA aims towards creation of durable assets such as well, ponds, canals, roads etc. by employing the willing people from rural sectors.

Through Mahatma Gandhi National Rural Employment Guarantee Act, the government aimed for achieving the following final objectives:

• Ensuring economic security for rural people.
• Creation and maintenance of rural assets.
• Environmental protection.
• Women empowerment.
• Creating social equity.
• Lowering of rural-urban migration.

While MGNREGA aimed for employment generation and rural asset creation by employing people for unskilled manual work, a specific set of guidelines were provided that defined the nature of work that will be allowed under MGNREGA. Here is the list of different types of work that are offered under MGNREGA:

• Gram Panchayat Bhawan and Bharat Nirman Rajiv Gandhi Sewa Kendra construction.
• Water harvesting and water conservation.
• Rural connectivity that will open access to rural areas in weathers.
• Tree plantation, afforestation and other drought-proofing work.
• Flood control and draining of areas that are water-logged.
• Minor and micro irrigation works and development of irrigation canals.
• Land development.
• Tank de-silting and traditional water bodies renovation.
• Any other work that Central Government may notify after properly consulting with State Governments.

Here are few other key features of MGNREGA:

• Under MGNREGA, the wage list is notified by the Center but is State-specific.
• Schedule of Rates (SoRs) are State-specific. State determines the Piece rates and Time rates.
• Under no circumstances, wages can fall below ₹ 100 in a single day.
• Unemployment allowance will be 1/4th of wage rate.
• Both females and males have equal right to work and are entitled for equal wage rates.
• MGNREGA takes a demand-based approach. This means that the willingness to work is first assessed and work is planned out and estimated. Beneficiaries (rural people) decide the time when they need work.
• Since 2008, beneficiaries have been receiving their wages directly in their post office or bank accounts.
• 33% of the total workforce has to be women.
• All people enrolling for MGNREGA will be given Job Cards.

Some interesting data on MGNREGA

Implementation of Mahatma Gandhi National Rural Employment Guarantee Act started since February 2, 2006 with 200 selected districts. By April 1, 2008, all districts all over India were covered under MGNREGA.

• 25 billion USD or ₹1,10,000 crore has been spent till date for wage payment since February 2, 2006.
• Employment of 12 billion or 1200 crore person-days have been generated so far.
• Since inception, 100 million or 10 crore new post office/bank accounts have been created.
• There has been an 81% increase in per person-day wage since the inception of MGNREGA. Minimum wage however varies from state to state and lies within the range of ₹ 122 and ₹
• 51% of total generated person-days came from SCs and STs and women accounted for 47% (well above 33% mandate).
• Total number of Job Cards issued till date stand at 120 million or 12 crore. Total number of muster rolls used till date for uploading on MIS or Management Information System is 90 million or 9 crore.

While that’s something to be proud about, MGNREGA has not really turned out to be as efficient as expected. Why? Continue reading!

Shortcomings/Problems of MGNREGA Scheme

Despite being a highly ambitious scheme with millions and millions of Indian money spent for the primary purpose of increasing economic security for MGNREGA has some serious problems. To start with, MGNREGA stands for more than just offering economic security. It is also about creating sustainable rural assets. It is also about bringing social equity. But, MGNREGA failed dramatically in these areas.

The major problem with MGNREGA was onset of leakages and corruption that killed the idea of social equity. Here is what happened:

• Fake bills and fake muster rolls were generated. This only drained the money of Indian tax-payers right through the drain. People who were supposed to get the money didn’t get it.
• Payments turned in significantly late. This happened because work measurements were delayed, which delayed the release of payment to the workers.
• 850,000 differently-abled people enrolled for work. Only 19% of these people were actually given work.
• Some so-called elite groups popped up. These groups grabbed majority of the Job Cards issued under MGNREGA, thereby depriving many others.

Unfortunately the workers did not engage in those activities. Rather, they moved on to digging pits in the name of creating ponds. Unfortunately, these pits fail to hold water for long as water quickly evaporated, leaving behind dry pits. The government was billed even for those useless pits!

All these reports came from Planning Commission which is in charge of monitoring the implementation and execution of this flagship program.