National Rural Employment Guarantee Act, 2005

National Rural Employment Guarantee Act 2005 (or, NREGA No. 42 , later renamed the “Mahatma Gandhi National Rural Employment Guarantee Act”, MGNREGA), is an Indian labor law and social security measure that aims to guarantee the ‘ right to work ‘.

It aims to enhance livelihood security in rural areas by providing at least 100 days of wage employment in a financial year. [1] [2]

The act was first proposed in 1991 by PV Narasimha Rao . [3] In 2006, it was finally accepted in the parliament and started implementation in 625 districts of India. Based on this pilot experience, NREGA was scoped up to cover all the districts of India from 1 April 2008. [4] The statute is hailed by the government as “the largest and most ambitious social security and public works program in the world”. [5] In its World Development Report 2014, the World Bank has a “stellar example of rural development”. [6]

The MGNREGA was established with the objective of “improving livelihood security in rural areas” by providing a minimum of 100 days of guaranteed employment in a financial year. [7]Another aim of MGNREGA is to create sustainable assets (such as roads, canals, ponds, wells). Employment is to be provided within 5 km of an applicant’s residence, and minimum wages are to be paid. If the application is not provided within 15 days of applying, Thus, employment under MGNREGA is a legal entitlement.

MGNREGA is to be applied mainly by gram panchayats (GPs). The involvement of contractors is banned. Labor-intensive tasks like creating infrastructure for water harvesting, drought relief and flood control are preferred.

NREGA can help in protecting the environment , empowering rural women , reducing rural-urban migration and fostering social equity , among others. ” [8]

The law provides many safeguards to promote its effective management and implementation. The act of mentions the principles and agencies for implementation, the list of allowed works, the financing pattern, the monitoring and evaluation , and the most importantly the detailed measures to ensure transparency and accountability.

Past Scenario


Starting from 1960, the first 30 years of experimentation with employment schemes in rural areas taught the importance of the rural management of the rural world, the Crash Scheme for Rural Employment of planning for outcomes, a ‘Pilot Intensive Rural Employment Program’, ‘Marginal Farmers and Agricultural Labor Scheme’ of rural economic development holistic development and better coordination with the states, the National Rural Employment Program (NREP) of community development, and the Rural Landless Employment Guarantee Program of focus on landless households. [9]The Planning Commission later approved the scheme and adopted on national scale. [10]

On April 1, 1989, to converge employment generation, infrastructure development and food security in rural areas, the integrated government NREP and RLEGP [n 1] into a new scheme JRY. The most significant change is the decentralization of implementation by implying local people through PRIs and hence a decreasing role of bureaucracy. [12]

On October 2, 1993, the Employment Insurance Scheme (EAS) was initiated by the premier minister to provide employment insurance for agricultural workers. Rao had started discussions on this act in 1991. [13] The role of the PRIs was reinforced with local self-government at the level called ‘ Zilla Parishad ‘ as the main implementing authority. Later, EAS was merged with SGRY in 2001. [14]

On April 1, 1999, the JRY was revamped and renamed to JGSY with a similar objective. The role of PRIs was further reinforced with the local self-government at the village level called ‘Village Panchayats’ as the sole implementing authority. In 2001, it was merged with SGRY. [15] [16]

In January 2001, the government introduced FWP similar to the one initiated in 1977. Once NREGA was enacted, the two were merged in 2006. [17]

On September 25, 2001 to converge employment generation, infrastructure development and food security in rural areas, the integrated government EAS and JGSY into a new scheme SGRY. The role of PRIs was retained with the Village Panchayats as the sole implementing authority. [18] Yet again due to implementation issues, it was merged with Mahatma Gandhi NREGA in 2006. [19]

The total government allocation to Juventa thesis of Mahatma Gandhi NREGA HAD beens about three-quarters of ₹ 1 trillion (US $ 16 trillion). [20]


According to the Eleventh Five Year Plan (2007-12), the number of Indians living on less than $ 1 a day, called the Below Poverty Line (BPL) , was 300 million dollars. Their proportion in the total population decreased from 36 per cent (1993-94) to 28 per cent (2004-05), [21] and the rural working class is dependent on agriculture for nearly 3 months per year. [22]The UPA Lok Sabha Elections in the country but failed. [23]

The NDA government has provided 150 days for rain hit areas. [24]

The registration process involves an application to the Gram Panchayat and issue of job cards. The wage employment must be provided within 15 days of the date of application. The work entitlement of ‘120 days by household may be shared between different adult members of the same household. [25]

The law also lists permissible works: water conservation and water harvesting ; drought proofing including afforestation ; irrigation works ; restoration of traditional water bodies; land development ; flood control ; rural connectivity; and works notified by the government. The Act sets a minimum limit to the wage-material ratio as 60:40. The provision of accredited engineers, worksite facilities and a weekly report is also mandated by the Act. [26]

In addition, the Act sets a minimum limit to the wages, to be paid with gender equality , or a time-rate basis or a piece-rate basis. The states are required to evolve a set of norms for the measurement of works and schedule of rates. Unemployment allowance must be paid if the work is not provided within the statutory limit of 15 days. [27]

The law stipulates Gram Panchayats to a single bank account for NREGA works. To promote transparency and accountability, the act mandates ‘monthly squaring of accounts’. [28] To ensure public accountability through public vigilance, the NREGA designates ‘social audits’ as key to its implementation. [29]

The most detailed part of the Act (chapter 10 and 11) deals with transparency and accountability that lays out role of the state, the public vigilance and, above all, the social audits. [30]

For evaluation of outcomes, the law of the records and the maintenance of records, the job cards, assets, muster rolls and complaints, by the implementing agencies at the village, block and state level. [31]

CEGC for Parliament and SEGCs for state legislatures , prescribing the role of the state of accountability and accountability , and taking action on audit reports, developing a Citizen ‘s Charter , establishing vigilance and monitoring committees, and developing a grievance. [32]

The Act recommends the establishment of ‘Technical Resource Support Groups’ at the District, state and central level of Information Technology , like creation of a ‘ Monitoring and Information System (MIS) ‘ and a NREGA website, to ensure quality in NREGA implementation through technical support . [33]

The law allows convergence of NREGA with other programs. As NREGA intends to create ‘additional’ employment, the convergence should not affect employment provided by other programs. [34]

The law and the Constitution of India

The Constitution of India – India’s Fundamental and Supreme Law.

The Act aims to follow the Directive Principles of State Policy enunciated in Part IV of the Constitution of India . The law by providing a ‘right to work’ is consistent with Article 41 which provides the state with the right to work. [35] The statute also seeks to protect the environment through rural works [36] which is consistent with Article 48A that direct the state to protect the environment. [37]

In according with the Article 21 of the Constitution of India That Guarantees the right to life with dignity to every citizen of India, this act Imparts dignity to the rural people through an assurance of livelihood security. [38] The Fundamental Right enshrined in Article 16 of the Constitution of the United States of America on the Status of Discrimination Against Sexuality, Race, Caste, Sex, Descent place of birth, place of residence or any of them. [39]NRIEGA Article 46 That requires the State to promote the interests of the business of the business of the scheduled and scheduled tribes and protect them from discrimination and exploitation. [40]

Article 40 mandates the state to organize the village and endow them with such powers and authority as to enable them to function as self-government units. [41] Conferring the primary responsibility of implementation on Gram Panchayats, the Act adheres to this constitutional principle. Also the process of decentralization initiated by the Constitutional Court of India is granted to the Panchayats [42] is further reinforced by the Mahatma Gandhi NREGA that endowed these rural self-government institutions with authority to implement the law. [43]

The law in action

Independent Academic Research

NREGA: economic security, self-targeting, women’s empowerment, asset creation, corruption, how the scheme impacts agricultural wages. An early general assessment in the north India states that NREGA was “making a difference to the lives of the rural poor, slowly but surely.” [44]

The evidence on self-targeting is a lot of unmet demand for work. [45] [46]

One of the objectives of NREGA is to improve the understanding of exploitative market conditions. Several studies have found that agricultural wages have increased significantly, especially for women since the inception of the scheme. [47] [48] This indicates that overall wage levels have been increased, however, further research highlights that the key benefit of the scheme lies in the reduction of wage volatility. [49] This highlights that NREGA may be an effective insurance scheme. Ongoing research efforts to evaluate the overall welfare effects of the scheme; a special focus has been made to understand the scheme.

Women under NREGA for de-silting a tank

Another important aspect of NREGA is the potential for women’s empowerment by providing them with opportunities for paid work. One third of all employment is reserved for women, the provision of child care facilities at the worksite – these are three important provisions for women in the Act. [50] More recent studies have suggested that women’s participation has remained high, though there are inter-state variations. [51] One study in bordering villages of Rajasthan, Madhya Pradesh, and Gujarat studied the effect on short term migration and child welfare. [52]who do not migrate, grade completed is higher. The same study found that demand for NREGA work is higher, even though migrant wages are higher. [53]

On asset creation, there are not too many detailed studies. NREGA offers a few examples of the potential for asset creation (a) and the lack of support for it. for poor realization of this potential. [54] [55] Others have pointed out that water harvesting and soil conservation works can be promoted through NREGA ” [56] A study conducted by researchers at the Indian Institute of Science and Technology. other collaborators attempts to quantify the environmental and socio-economic benefits of works done through the NREGA[57]

Corruption in government programs has been a serious concern, and NREGA has been no exception. According to recent estimates, in NREGA, corruption corruption has fallen to about 50% in 2007-8 to between 4-30% in 2009-10. [58] Much of this improvement is attributable to the NREGA earnings through bank and post office accounts. [59] Some of the success in battling corruption can also be attributed to the strong provisions for community monitoring. [60] Others find that “the overall social auditing effect is easy-to-detect malpractices”. [61]

A few papers also study the link between electoral gains and implementation of NREGA. One studies the effect in Andhra Pradesh – the authors find that “while politics can influence the extent to which a small extent, this is not universally true and does not undermine the effective targeting and good work of the scheme at large.” [62] The two other studies focus on these links in Rajasthan [63] and West Bengal. [64] Several local case studies are also being conducted to identify the regional impacts of NREGA. [65]

Assessment of the act by the constitutional auditor

The second performance audit by the Comptroller and Auditor General (CAG) of India covered 3,848 gram panchayats (GPs) in 28 states and 4 union territories (UTs) from April 2007 to March 2012. [66] This comprehensive survey by the CAG documents lapses in implementation of the act. [67] [68] The main problems identified in the audit included: poor planning (in which one-third of Gram Panchayats, the planning process mandated by the act had not been followed, [69]education and communication IEC) by the state governments, shortage of staff (eg, Gram Rozgar Sewaks) and so on. [70] Notwithstanding the statutory requirement of notification, yet not yet notified the eight-years-old scheme. The comprehensive assessment of the performance of the law by the constitutional auditor reveals serious lapses of the issue of public awareness, mismanagement and institutional incapacity. The CAG also suggested some corrective measures.

Major recommendations of the CAG audit on MGNREGA

Even though the social audits have a statutory mandate of Section 17 (as outlined in Chapter 11 of the NREGA Operational Guidelines), only seven states have the necessary legal authority. [71] Although the Central Council is mandated to establish a central evaluation and monitoring system for the NREGA Operational Guidelines, even after six years it is still to fulfill the NREGA directive. Further, the CAG audit reports the discrepancies in the maintenance of prescriptive basic records in the world of the gram panchayats (GPs) which inhibits the critical evaluation of the NREGA outcomes. The unreliability of Management Information System(MIS), due to significant disparity between the MIS and the current official documents, is also reported. [72]

To increase public awareness, the intensification of information, education and communication (IEC) activities is recommended. To improve management of outcomes, it is recommended to maintain records at the gram panchayat (GP)level. Further the Central Council is recommended to establish a central evaluation and monitoring system for the national level, comprehensive and independent evaluation of the scheme. The CAG also recommends a rate of pay in the rural poor and a wage ratio of 60:40 in the NREGA works. Moreover, the CAG recommends proper maintenance of accounts, in a uniform format, on a monthly basis and also enforcing the statutory guidelines to ensure transparency in the disposal of funds. For capacity building, the CAG recommends an increase in staff hiring to fill the vacancy. [73]

For the first time, the CAG also included a survey of more than 38,000 NREGA beneficiaries. [74] An earlier evaluation of the NREGA by the CAG was criticized for its methodology. [75]

Evaluation of the law by the government

Ex-Prime Minister of India Manmohan Singh released an anthologys of research studies on the MGNREGA called “MGNREGA Sameeksha” in New Delhi on 14 July 2012, about a year before the CAG report. [76] Aruna Roy and Nikhil Dey said that “the MGNREGA Sameeksha is a significant innovation to evaluate policy and delivery”. [77] The Indian Institute of Management (IIMs) , Indian Institutes of Technology (IITs) and others in collaboration with United Nations Development Program (UNDP) published from 2008 to 2012. [78] The Prime Minister said:

The Mahatma Gandhi NREGA story in numbers is a story worth telling … the scheme scores high is inclusivness … no welfare scheme in recent memory HAS caught the imagination of the people as much as NREGA has … under qui ₹ 1 10,000 crore (about USD 25 billion) have been paid to pay 1,200 crore (12 billion) people. [79]

Minister of Rural Development Jairam Ramesh says in the ‘MGNREGA Sameeksha’:

It is perhaps the largest and most ambitious social security program in the world. … soundness and high potential of the MGNREGA are well established …. That, at any rate, is one of the main messages MGNREGA. It is also a message that comes from the resounding popularity of MGNREGA-today, about one-fourth of all rural and rural programs. [5]

Meanwhile, the social audits in two Indian states highlight the potential of the law if implemented effectively.

Further the Minister says:

MGNREGA’s other quantitative achievements have been striking as well:

  1. Since its inception in 2006, around ₹ 1,10,000 crore (about USD $ 25 billion) has been generated and 1200 crore (12 billion) person-days of employment has been generated. On average, 5 crore (50 million) has been provided employment every year since 2008.
  2. Eighty per cent of households are being paid directly through bank / post office accounts, and 10 crore (100 million) new bank / post office accounts have been opened.
  3. The average wage per person-day has gone up by 81 per cent since the Scheme’s inception, with state-level variations. The Enable notifications wage today varies from a minimum of ₹ 122 (USD $ 2.5) in Bihar, Jharkhand to ₹ 191 (USD $ 4) in Haryana.
  4. Scheduled Castes (SCs) and Scheduled Tribes (STs) have accounted for 51 per cent of the total person-days generated and women for 47 per cent, well above the mandatory 33 per cent as required by the Act.
  5. 146 lakh (14.6 million) were completed from the beginning of the program, of which about 60 percent were completed.
  6. 12 crore (120 million) Job Cards (JCs) have been awarded along with the 9 crore (90 million) muster rolls have been uploaded to the Management Information System (MIS), available for public scrutiny. Since 2010-11, all details with regard to the MGNREGA are available on the MIS in the public domain. [80]

Social audit

Main article: Social audit

Civil society organizations (CSOs), nongovernmental organizations (NGOs), political representatives, civil servants and workers of Rajasthan and Andhra Pradesh collectively organize social audits to prevent corruption under the NREGA. [81] As the corruption is attributed to the secrecy in governance, the ‘Jansunwai’ or public hearing and the right to information (RTI) , enacted in 2005, are used to fight this secret Goetz 1999 Official records obtained using RTI are read out at the public hearing to identify and rectify irregularities. “This process of accounting and reporting is subject to a change in the accounting period.Aiyar 2009 , pp. 8-9 Participation of informed citizens promotes collective responsibility and awareness about entitlements. Chandoke 2007

The process of a social audit

A continuous process of social auditing NREGA works with public hearing and verification of the stipulated 11 stages of implementation: registration of families; distribution of job cards; receipt of work applications; selection of suitable public works; preparation of technical estimates; work allocation; implementation and supervision; payment of wages; payment of unemployment allowance; evaluation of outcomes; and mandatory social audit in the Gram Sabha or Social Audit Forum. The Gram Panchayat Secretary called ‘Sarpanch’ is designated as the responsible authority for carrying out the social audit at all stages. For some courses, the junior junior program is also responsible along with Sarpanch. [82]

The statute designates the Gram Sabha meetings held to conduct social audit as the ‘Social Audit Forums’ and spells out three steps to make them effective: publicity and preparation of documents; organizational and procedural aspects; and the obligatory agenda involving questions verifying compliance with norms. [83]

An application under the RTI to access official documents is the first step of the social audit. Then the personal management of the social audit. Finally, the ‘Jansunwai’ or public hearing is organized at two levels: the Panchayat or village level and the Mandal level. The audience public dispatches involving the beneficiaries, political representatives, civil servants and, above all, the government officers responsible for implementing the NREGA works highlights. [84]

These social audits on NREGA works in Rajasthan highlight: a significant demand for the scheme, less than 2 per cent corruption in the form of fudging of muster rolls, building the water harvesting infrastructure as the first priority in the drought-prone district, reduction of out-migration, and above all the women participation of more than 80 percent in the employment guarantee scheme. The need for effective management of tasks and the payment of wages is also emphasized. [85] [86]

To evaluate the effectiveness of the social audits on NREGA works in Andhra Pradesh, a World Bank study investigated the effect of social auditing on NREGA, its effects on the NREGA implementation, and its efficiency as a recalcitrant mechanism. The study found that the public awareness of the NREGA has increased to about 99 per cent after the social audit. Further, the effectiveness of NREGA implementation increased from an average of about 60 per cent to about 97 per cent. [87] [88]


Save MGNREGA is a set of demands of the joint meeting of the national leadership of CITU, AIAWU, AIDWA and AIKS in New Delhi. The agenda is to discuss the dilution of MGNREGA scheme by the new government. Following demands have been proposed: [89]

1. Government of India should increase the rate of increase to 200 and per day wage can be increased to Rs. 300.

2. Job card to be issued for everyone who demands job, failing which, after 15 days employment benefits should be given.

3. Minimum 100 days of work should be ensured to all card holders

4. Minimum wage act should be strictly implemented. Delay in a salary payment should be resolved.

5. MGNREGA should be extended to urban areas.

6. Gram Sabhas should be strengthened to monitor the implementation of the scheme and also to check corruption.

New Amendments Proposed in 2014

This section needs to be updated . Please update this article to reflect recent events or new information. (October 2015)

Union Rural Development Minister, Nitin Gadkari , proposed to limit MGNREGA programs within tribal and poor areas. He also proposed to change the labor: material ratio from 60:40 to 51:49. The program will be implemented in 2,500 backward blocks under Intensive Participatory Planning Exercise. These blocks are identified by the Planning Commission Estimate of 2013 and a Backwardness Index prepared by Planning Commission using the 2011 census. This backwardness index is based on agriculture, female literacy rates, households without access to electricity, and households without access to food and sanitation. [90]

Both proposals came in for sharp criticism. A number of economists with various views on the idea of ​​restricting or “focussing” implementation in a few districts or blocks. [91] [92] [93]

In the November 2014 cabinet expansion, Birender Singh replaced Nitin Gadkari as rural development minister. Among the first statements made by the new minister was an assurance that NREGA would continue in all districts. Around the same time, however, NREGA budget saw a sharp cut [94] and in the name of ‘focusing’ on a few blocks. [95]

New Amendments Proposed in 2017

Finance Minister Arun Jaitley announced Rs. 48,000 crore to be allocated to the MGNREGA as a part of 2017 Union budget of India . [96] [97]

Controversies and criticisms

A major criticism of the MNREGA is that a lot of money disbursed by the government gets off the hook, thus leaving a number of MGNREGA workers with unpaid wages or less than standard wages. In Mahuadand, Jharkhand , most of the people who have worked under the MNREGA did not get paid. [98]

Another criticism of NREGA is that it is making agriculture less profitable. Landholders often oppose it on these grounds. The big farmer’s point of view can be summed up as follows: Landless laborers are more likely to work at NREGA worksites; farmers May-have to sell Their land, thereby laying the foundation for corporate farming .

Economists like Jagdish Bhagwati and Arvind Panagariya have described NREGA as “an inefficient instrument of shifting income to the poor” – the general notion of NREGA workers. Economists who have not done so have had the opportunity to do so, and that they need to be successful, saying that any scheme with 85 percent leakages can not be proclaimed to be “working successfully”. [99]

The workers can not be less than: Rs. 80 laborers in the private agricultural labor market, there is no farm work for several months; few old age people who are jobless for at least 8 months a year; when farm work is available they go there first; johns and most of the time.


NREGA has been criticized for leakages and corrupt implementation. It has been made that they have received payments and they have not done so, or have not done so. [100] In 2014-15, only 28% of the payments were made on time to workers. Following the allegations of corruption in the scheme, NDA government commissioned a re-evaluation of the scheme in 2015. [2] G

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