MGNREGA: Issues and Significance – Explained, pointwise


The government of India has been running the world’s largest employment guarantee program since 2005 under the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA). It has been in implementation for more than 15 years and has delivered optimum results. Although some issues thwart its success which must be resolved.

  • It guarantees 100 days of work a year to every rural household with an aim to enhance the livelihood security of people.
  • The National Rural Employment Guarantee Act, 2005 introduced the scheme. In 2010, NREGA renamed as MGNREGA
  • The Act currently covers all districts except for those that have a 100% urban population.
  • The Ministry of Rural Development (MRD) in association with the state governments monitors the implementation of the scheme.
Key Features of the MGNREGS
  1. Demand-driven scheme: Worker will get the work whenever he demands and not when the Government has work available.
  2. Employment Allowance: Gram Panchayat has the mandate to provide employment within 15 days of a work application. If it fails, the worker will get an unemployment allowance.
  3. Timely Payment: Payment of wages within 15 days of completion of work. In case of failure, the worker will get a delay compensation of 0.05% per day of wages earned.
  4. Women empowerment: Minimum one-third of the workers should be women
  5. Minimum wages: Wage payment should be according to the Minimum Wages Act 1948 for agricultural laborers in the State.
  6. Gram Sabhas conduct Social audits to enable the community to monitor the implementation of the scheme. 
  7. Both the Center and the States share the funding of the scheme.
Performance of MGNREGA so far
  • It has generated more than 31 billion person-days of employment in the last 15 years.
  • The government has spent over Rs 6.4 lakh crore in the last 15 years on this demand-driven program.
  • Since 2006, more than 30 million water conservation-related assets have been created in the country’s rural areas.

Performance of MGNREGA during Covid-19 Pandemic:

  • According to the government data, over 11 crore people worked under MGNREGS during the financial year 2020-21 alone. Few other achievements of the Scheme last year are,
    • This is the first time since the launch of the scheme in 2006-07 that the MGNREGS  numbers crossed the 11-crore mark in a year.
    • Further, the 11 crore mark is also higher by about 41.75% if we compare 2019-20 data (about 7.88 crores worked).
    • In 2020-21, the total expenditure was 62.31% higher than in 2019-20.
    • As part of the economic package during the Covid-19 pandemic, the government announced additional funding of Rs 40,000 crore for the MGNREGS over and above the budgetary allocation of  2020-21.
Significance of MGNREGA
  • Rural Development: The programme mandates that at least 60 percent of the works undertaken must be related to land and water conservation. The creation of these productive assets boost rural incomes as the majority of villages are agrarian.
    • For instance, In Barmani village of Madhya Pradesh’s Sidhi district, the MGNREGA created water conservation assets. So the internal migrants went home started resuming farming and stayed there after the situation turns normal.
  • Tackling Water Stress: The water conservation structures built under MGNREGA have potentially conserved at least 28,741 million cubic metres of water in the past 15 years. This is an immense achievement to tackle the approaching water stress.
  • Curtailing Distress Migration: The scheme provides support in times of distress and individuals are not forced to migrate into cities.
    • For instance, distress migration has stopped in Bandlapalli village in Andhra Pradesh’s Ananthapuramu district and the village is drought-proof today.
  • Women Empowerment: This is a natural result of employing women to 1/3rd of all MGNREGA jobs. 
    • Eg – MGNREGA has led to the formation of the country’s largest group of trained women well-diggers in Pookkottukavu village of Kerala’s Palakkad district. 
  • Battling Uncertainties: The program provided a sigh of relief to millions of migrants and other people who lost their livelihood in the pandemic times. The scheme ensured that the vulnerable get access to basic income thereby decreasing suicide rates in the country.
  • Community Assets: The scheme has led to the creation of common community assets. These assets are built by communities on common lands thereby creating a sense of responsibility towards the structure which results in better care.
    • For instance, many Johads (percolation ponds) had remained abandoned for several years in many villages of Haryana. However, villagers revived them under the MGNREGA.
Issues with MGNREGA
  • Data on the impact of productive assets: The government does not monitor whether a structure has actually helped water conservation. Further, there is no government data on the impact on groundwater levels, improvements in livelihoods etc. post the creation of assets.
  • Poor maintenance: Many structures created under MGNREGA become defunct due to poor maintenance. This simply implies the wastage of time, energy, and resources.
  • Inadequate Funds: A huge surge in demand for MGNREGA works has been witnessed in pandemic times. But the government hasn’t duly allocated funding in a similar proportion.
    • Rs. 73,000 crores have been allocated for the year 2021-22. It is greater than the original allocation of Rs. 61,500 crores for 2020-21. But this is 34.5% lower than the revised estimate of Rs.1,11,500 crores.
  • Insufficient support: With the unemployment rate reaching a 45-year high at 6%, giving merely 100 days of employment is not sufficient.
Suggestions to improve the MGNREGA
  • The villages must learn from the success of fellow villages. In this regard, every panchayat should ensure caution while framing and implementing the mandatory five-year plan under MGNREGA.
  • The government must now measure the potential outcome from the assets created under MGNREGA. For this, it must track the impact of water harvesting structures in terms of local land and water resources.
  • For constant monitoring and maintenance of water work, the government can get the support of communities and civil society organizations like the Paani Foundation.
  • Adequate facilities such as soap, water, and masks, etc. must be provided free of cost to workers during the pandemic.
  • The government should provide greater funds for the proper implementation of the scheme. It currently provides 0.47% of GDP while the World Bank recommends 1.7 % for the optimal functioning of the program.
  • The government can enhance the number of days to 150-200 days depending on the vulnerability in a particular state.
    • The states can increase it as done by Odisha and Himachal Pradesh which have added 50 days and made it 150 days in a year

The government must fill the lacunas in MGNREGA. The government can then see a variety of benefits such as: vulnerable section gets due relief, villages get productive assets, the burden on cities will get reduced etc. Apart from that, it will also fulfil the constitutional duty under Article 41 (Right to work in certain cases).

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