MGNREGA: The Way Forward

Considering both the reach and the impact of MGNREGA on the rural poor, and notwithstanding the shroud of corruption, late payments and fears of its benefits not reaching the target group that hangs around it, discarding, diluting or curbing this “stellar example of rural development” would amount to throwing the baby out with the bathwater

T he Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) 2005 was notified on the 7 September 2005, with the mandate to provide 100 days of guaranteed wage employment in a financial year (FY) to every rural household whose adult members volunteer to do unskilled manual work. The Act, in its first phase of implementation, was enacted in 200 districts, and was extended to an additional 130 districts in 2007–08. Since then, MGNREGA has covered about 650 districts across the entire country, excluding the districts that have 100 per cent urban population.

Unlike the earlier allocation-based wage employment programme, MGNREGA is demand-driven and the transfer of resources from the central government to the state is based on the demand for employment in each state. The Act has the legal provision for allowances and compensation, in case of failure to provide work on demand, and for delays in the payment for the work undertaken.

Since its inception in 2005, MGNREGA has provided employment to an average of 50 million households every year. It remains, by far, the most participated public wage programme in the world. The government has spent close to Rs 2.6 lakh crores on the Scheme, with 70 percent of the total expenditure spent on wages. Over the years, the Scheme’s notified wages have increased from Rs 65 per person days in 2006 to Rs 124 in 2013.