Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS)

Context: The Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) faced a budget shortfall in 2024-25, with no additional allocation provided, leading to delays in wage disbursement for workers.

About MGNREGS

• The Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) serves as the legislative foundation for the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS).
• Launch: 2005 by the Ministry of Rural Development

Key Features

• To provide at least 100 days of guaranteed wage employment in a financial year to every household whose adult members volunteer to do unskilled manual work.
• Unemployment allowance must be provided if work is not allotted.
• The scheme is funded by the Central Government (100% wages) and a shared material cost (60% Centre, 40% States).
• Aims to improve the economic resources available to the poor.
• Proactively focuses on including all social segments.
• Strengthens the role and capabilities of Panchayati Raj Institutions (PRIs).

Provisions and Regulation

• Section 3 (3): The disbursement of daily wages shall be made on a weekly basis or in any case not later than a fortnight after the date on which such work was done.
• Section 7(1) of MGNREGA: It is a legal guarantee, ensuring that any rural adult can request work and must receive it within 15 days.
  • If this commitment is not met, an “unemployment allowance“ must be provided.
• Section 17 of MGNREGA: This requires Gram Sabhas to oversee work execution, establishing a legal foundation for social audits.
• 2011 Rules for Auditing MGNREGA: Developed in collaboration with India’s CAG, establish social audit procedures and specify the duties of entities like the Social Audit Unit (SAU), state governments, and MGNREGA field workers.
  • Social audit units function independently from MGNREGA implementing agencies, guaranteeing unbiased evaluations, and are funded with 0.5% of the state’s previous year’s MGNREGA spending.

Benefits of MNREGA

• Rural Income Enhancement: The scheme offers critical employment opportunities, particularly in off-seasons, thereby boosting household incomes in rural areas.
  • Eg., In villages like Sarai in Bihar, MGNREGA has significantly augmented local incomes, especially in non-agricultural periods.
• Mitigating Rural-Urban Migration: By providing local employment, MGNREGA lessens the need for rural residents to migrate to urban areas for work.
  • Eg., In Neemka in Uttar Pradesh, the scheme has reduced economic-driven migration and improved local living conditions.
• Women’s Economic Independence: With its mandate for female labour participation and direct wage payments to women.
  • Eg., In Kudumbashree (Kerala), the program has led to the formation of significant women-led initiatives.
• Cushioning Against Economic Shocks: The scheme has been a lifeline during crises like the COVID-19 pandemic, providing essential employment to those in need.
• Community Asset Development: MGNREGA plays a vital role in reviving and creating community assets, particularly in water conservation.
  • Eg., The restoration of traditional irrigation systems like Kul in Himachal Pradesh, has revitalized local agriculture.
• Environmental Restoration: The program contributes to environmental conservation efforts, such as afforestation and soil conservation.
  • Eg., In regions like Sundarbans, and West Bengal, MGNREGA has been instrumental in mangrove plantation and soil erosion control.
• Local Infrastructure Improvement: Beyond agricultural support, MGNREGA has facilitated the development of basic rural infrastructure, such as roads and public buildings.
  • Eg., In tribal areas of Chhattisgarh, the scheme has significantly improved connectivity and access to facilities.
• Skill Development: In tribal belts of Odisha, MGNREGA has provided training in traditional arts, aiding in preserving cultural heritage while enhancing livelihoods.

What are the Challenges Associated?

• Deficient Disbursement Of Unemployment Allowances: In the financial year 2023-24, only ₹90,000 was released as unemployment allowance, a stark decrease from ₹7.8 lakh in 2022-23.
  • This drastic reduction indicates a failure to meet the scheme’s objective of providing financial support to workers when employment demands are unmet.
• A report by civil society organisations LibTech India and NREGA Sangharsh Morcha:
  • Account Deletions: Mandatory linking of Aadhaar to job cards under the Aadhaar-Based Payment System (ABPS) led to severe consequences for many workers:
    • Eg., Approximately 39 lakh workers were deleted from MGNREGS rolls between April and September 2024 alone due to non-compliance with Aadhaar linking requirements.
  • Payment Delays: Around 67 million workers have not received wages since April 2024, primarily due to issues stemming from the Aadhaar linking process.
• Low Budget Allocation Trend: The 2024-25 allocation of ₹86,000 crore was insufficient to meet demands, marking a shift from past trends where additional funds were allocated as needed.
  • g., during the pandemic in 2020-21, the allocation increased from ₹61,500 crore to ₹1,11,500 crore, reflecting responsiveness to demand.
• Minimum Wage Determination: A panel from the Ministry of Rural Development has highlighted that, currently linked to the Consumer Price Index for Agricultural Labourers (CPI-AL), fails to account for the diverse nature of work performed under the scheme.

Steps to Strengthen the MGNREGA Scheme

• Increase Budget Allocation: Allocate sufficient funds to ensure timely wage payments, meet rising demand for rural employment, and safeguard workers’ dignity and livelihood.
• Enhance Digital Systems: Review and upgrade digital tools like ABPS to address technical issues, improve infrastructure, and ensure user-friendliness, especially for rural workers.
• Improve Accountability Mechanisms: Strengthen mechanisms to address delays, enforce timely compensation as per MGNREGA provisions, and enhance reporting, monitoring, and grievance redress systems.
• Switch Minimum Wage Determination: Switch to the Consumer Price Index-Rural (CPI-R), as it is more updated and considers higher costs associated with education and healthcare.
• Implement Reforms for Equity: Introduce reforms to ensure transparent and efficient wage distribution, eliminate caste-based inequalities, and promote fair treatment for all workers.

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