Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA)

The Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) is an Indian law that aims to guarantee the 'right to work' and ensure 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. The statute is hailed by the government as "the largest and most ambitious social security and public works programme in the world".

Targeting poverty through employment generation using rural works has had a long history in India that began in the 1960s. After the first three decades of experimentation, the government launched major schemes like Jawahar Rozgar Yojana, Employment Assurance Scheme, Food for Work Programme, Jawahar Gram Samridhi Yojana and Sampoorna Grameen Rozgar Yojana that were forerunners to Mahatma Gandhi NREGA. The theme of government approach had been to merge old schemes to introduce new ones while retaining the basic objective of providing additional wage employment involving unskilled manual work and also to create durable assets. The major responsibility of implementation was also gradually transferred to the Panchayati Raj Institutions. 

The Act was enacted by a central legislation on 25^th August, 2005 and was implemented in rural districts in 3 phases. Each state is required to design an employment guarantee scheme based on a set of national guidelines. 

Key design features in the context of social security and unemployment support:-

Guaranteed Employment  - Any adult member of a rural household applying for work under the Act is entitled to employment. Every rural household is entitled to not more than 100 days of employment.

Guaranteed Wages - Wages are to be paid on a weekly basis and not beyond a fortnight. Wages are to be paid on the basis of:

Centre - notified, state- specific MGNREGA wage list.

Time rates and Piece rates as per state - specific Schedule of Rates (SoRs). In any case, the wage cannot be at a rate less than Rs. 100 per day.

Unemployment Allowance – If work is not provided within 15 days of applying, the state is expected to pay an unemployment allowance which is one - fourth of the wage rate.

Provision of Work – Work is to be provided within a 5km radius of the applicant’s village, else compensation of 10 per cent extra wage is to be provided to meet expenses of travel.

Gender Equity – Men and women are entitled to equal payment of wages. One - third of the beneficiaries are supposed to be women.

Financial Inclusion – Since 2008, all wage payments have had to be transferred to bank or post office accounts of beneficiaries.

Social Security Measures  – In 2008, a provision was created which made it possible to cover beneficiaries under either the Janashree Bima Yojana (JBY) or the Rashtriya Swasthya Bima Yojana (RSBY).

Transparency and Accountability  – All MGNREGA - related accounts and records documents have to be available for public scrutiny. Contractors and use of machinery is prohibited.

Rights - based, demand - driven approach – Estimation and planning of work is conducted on the basis of the demand for work. Hence, beneficiaries of the scheme are enabled to decide the point in time at which they want to work.

The cost of the scheme is shared between the Centre and the State in the ratio of 90:10.

The Central Government will bear the following costs:-

a) The entire cost of wages for unskilled manual workers.

b)75 percent of the cost of material and wages for skilled and semi-skilled workers.

c) Administrative expenses, which will include, inter alia, the salary and allowances of Programme Officers and their support staff and work site facilities.

d) Administrative expenses of the Central Employment guarantee Council.

The State Government will bear the following costs:-

a) 25 percent of the cost of material and wages for skilled and semi-skilled workers.

b) Unemployment allowance payable in case the State Government cannot provide wage employment within 15 days of application.

c) Administrative expenses of the State Employment Guarantee Council.

Tripura has ranked first in implementing the Mahatma Gandhi National Rural Employment Guarantee Act in 2012-13 by providing 86.27 days of work on an average to a rural household, State Rural Development Minister Jitendra Chowdhury claimed on Apr 9, 2013. Tripura has retained its top position for the third consecutive year in the country in implementation of Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) at the statutory minimum wages of Rs.124/- per day."When the national average is 39, the state could provide 86.27 days of work to the job card holders.

Tripura is followed by Mizoram (69.25 mandays per household) and Tamil Nadu (51.26 days of work per job card holders). Women in the state got more jobs than their male counterparts under the scheme. 

'MGNREGA 2.0' with 30 new works launched:-

The 100-days employment guarantee scheme was on May 08, 2012, Tuesday expanded to include 30 new works related to agriculture, watershed, livestock, fisheries, flood management and irrigation and aligned with a national sanitation campaign.

"It is the first time since the launch of the scheme (Mahatma Gandhi National Rural Employment Guarantee Act) that 30 new works have been added in its schedule.

Rural Development Minister Jairam Ramesh said his ministry had sought to add as many agriculture-related works to MGNREGA as possible. The new norms provided that Rs.4,500 could be contributed as labour component from MGNREGA towards construction of toilets under Total Sanitation Campaign (TSC). He said quality toilets would be constructed in rural areas for Rs.9,900.

The focus of the expanded MGNREGA would be in blocks with sizeable population of scheduled castes and scheduled tribes and those which had been getting Rs.12-crore fund in a year under the scheme, said Mihir Shah, a member of the Planning Commission.

The government wanted to make MGNREGA a productivity-enhancing instrument which led to an increase in agricultural output.

Ramesh said panchayats would decide the priority of works in gram sabha meetings with a stipulation that overall labour to material ratio would be 60:40.

Panchayats should open a separate account for MGNREGA as they received sizeable funds under the scheme every year.

Kerala, Bihar, Sikkim, Chhattisgarh, Madhya Pradesh and Rajasthan had made suggestions in the task undertaken by the ministry to extend the list of works.