Mahatma Gandhi National Rural Employment Guarantee Act, 2005 | Economics Optional Notes for UPSC PDF Download

What is MGNREGA?

• About: MGNREGA is one of the largest work guarantee programmes in the world launched in 2005 by the Ministry of Rural development.
  • The primary objective of the scheme is to guarantee 100 days of employment in every financial year to adult members of any rural household willing to do public work-related unskilled manual work.
  • As of 2022-23, there are 15.4 crore active workers under the MGNREGA.
• Legal Right to Work: Unlike earlier employment guarantee schemes, the act aims at addressing the causes of chronic poverty through a rights-based framework.
  • At least one-third of beneficiaries have to be women.
  • Wages must be paid according to the statutory minimum wages specified for agricultural labourers in the state under the Minimum Wages Act, 1948.
• Demand-Driven Scheme: The most important part of MGNREGA’s design is its legally-backed guarantee for any rural adult to get work within 15 days of demanding it, failing which an ‘unemployment allowance’ must be given.
  • This demand-driven scheme enables the self-selection of workers.
• Decentralised planning: There is an emphasis on strengthening the process of decentralisation by giving a significant role in Panchayati Raj Institutions (PRIs) in planning and implementing these works.
  • The act mandates Gram sabhas to recommend the works that are to be undertaken and at least 50% of the works must be executed by them.

MGNREGA – State Employment Guarantee Council (SEGC)

The State Employment Guarantee Council is responsible to advise state government for the implementation of the MGNREG scheme. Some important functions of SEGC under MNREGS are:

• The suggestion of improvements in the execution of the scheme.
• Evaluation and monitoring of the scheme.
• To recommend proposals of the works to the central government.
• To aware the districts about the scheme and its features.
• To prepare an annual report to be submitted by the state government before the state legislature.

This law and the employment guarantee schemes which are part of its provisions are important from the IAS exam point of view. UPSC aspirants should read about this government scheme in detail as questions related to this topic are asked in the Prelims exam and in General Studies paper II. The questions for government schemes like MGNREGA are classified under Welfare schemes, and the topic has a significant overlap with topics like human development, poverty, and hunger.

What are the Issues Associated with Implementation of Scheme?

• Delay and Insufficiency in Funds Dispersal: Most states have failed to disburse wages within 15 days as mandated by MGNREGA. In addition, workers are not compensated for a delay in payment of wages.
  • This has turned the scheme into a supply-based programme and subsequently, workers had begun to lose interest in working under it.
  • There is ample evidence by now, including an admission by the Ministry of Finance, that delays in wage payments are a consequence of insufficient funds.
• Caste Based Segregation: There were significant variations in delays by caste. While 46% of payments to SC (Scheduled Caste) workers and 37% for ST (Scheduled Tribes) workers were completed in the mandated seven-day period, it was a dismal 26% for non-SC/ST workers.
  • The negative impact of caste-based segregation was felt acutely in poorer States such as Madhya Pradesh, Jharkhand, Odisha and West Bengal.
• Ineffective Role of PRI: With very little autonomy, gram panchayats are not able to implement this act in an effective and efficient manner.
• Large Number of Incomplete works: There has been a delay in the completion of works under MGNREGA and inspection of projects has been irregular. Also, there is an issue of quality of work and asset creation under MGNREGA.
• Fabrication of Job cards: There are several issues related to the existence of fake job cards, the inclusion of fictitious names, missing entries and delays in making entries in job cards.
• The Azim Premji University conducted a study across four states (Bihar, Karnataka, Maharashtra, and Madhya Pradesh), revealing that the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) played a crucial role in compensating for 20-80% of the income loss caused by the Covid-19 induced lockdown.
  • Nevertheless, the study found that 39% of the households surveyed did not receive any employment opportunities throughout the Covid-19 year due to insufficient works being sanctioned or opened.