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The Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) is an Indian job guarantee scheme, enacted by legislation on 25 August 2005. The scheme provides a legal guarantee for at least one hundred days of employment in every financial year to adult members of any household willing to do public work-related unskilled manual work at the statutory minimum wage of 120 (US$2.20) per day in 2009 prices.If they fail to do so the govt. has to pay the salary at their homes. ^[1] The Central government outlay for scheme is 4000 billion (US$73 billion) in FY 2010–11.^[2]

This act was introduced with an aim of improving the purchasing power of the rural people, primarily semi or un-skilled work to people living in rural India, whether or not they are below the poverty line. Around one-third of the stipulated work force is women. The law was initially called the National Rural Employment Guarantee Act (NREGA) but was renamed on 2 October 2009.^[3]

In 2011, the program was widely criticised as no more effective than other poverty reduction programs in India. Despite its best intentions, MGNREGA is beset with controversy about corrupt officials, deficit financing as the source of funds, poor quality of infrastructure built under this program, and unintended destructive effect on poverty.^[4][5][6]

Political background [edit]

A NREGA Work site in Kerala www.nrega.nic.in

This act was brought about by the UPA-1 coalition government supported by the left parties. And has been labelled as one of the causes for voting UPA back into power as UPA 2

Dr. Jean Drèze, a Belgian born economist, at the Delhi School of Economics, has been a major influence on this project.^[7] A variety of people's movements and organisations actively campaigned for this act.^[8]

The plan [edit]

The act directs state governments to implement MGNREGA "schemes". Under the MGNREGA the Central Government meets the cost towards the payment of wage, 3/4 of material cost and some percentage of administrative cost. State Governments meet the cost of unemployment allowance, 1/4 of material cost and administrative cost of State council. Since the State Governments pay the unemployment allowance, they are heavily incentivised to offer employment to workers.

However, it is up to the State Government to decide the amount of unemployment allowance, subject to the stipulation that it not be less than 1/4 the minimum wage for the first 30 days, and not less than 1/2 the minimum wage thereafter. 100 days of employment (or unemployment allowance) per household must be provided to able and willing workers every financial year.

Provisions under NREGA [edit]

• Adult members of a rural household, willing to do unskilled manual work, are required to make registration in writing or orally to the local Gram Panchayat
• The Gram Panchayat after due verification will issue a Job Card. The Job Card will bear the photograph of all adult members of the household willing to work under NREGA and is free of cost.
• The Job Card should be issued within 15 days of application.
• A Job Card holder may submit a written application for employment to the Gram Panchayat, stating the time and duration for which work is sought. The minimum days of employment have to be at least fourteen.
• The Gram Panchayat will issue a dated receipt of the written application for employment, against which the guarantee of providing employment within 15 days operates
• Employment will be given within 15 days of application for work, if it is not then daily unemployment allowance as per the Act, has to be paid liability of payment of unemployment allowance is of the States.
• Work should ordinarily be provided within 5 km radius of the village. In case work is provided beyond 5 km, extra wages of 10% are payable to meet additional transportation and living expenses
• Wages are to be paid according to the Minimum Wages Act 1948 for agricultural labourers in the State, unless the Centre notices a wage rate which will not be less than 60 (US$1.10) per day. Equal wages will be provided to both men and women.

Note: The original version of the Act was passed with Rs155/ day as the minimum wage that needs to be paid under NREGA. However, a lot of states in India already have wage regulations with minimum wages set at more than 100 (US$1.80) per day. NREGA's minimum wage has since been changed to 130 (US$2.40) per day.

• Wages are to be paid according to piece rate or daily rate. Disbursement of wages has to be done on weekly basis and not beyond a fortnight in any case.
• At least one-third beneficiaries shall be women who have registered and requested work under the scheme.
• Work site facilities such as crèche, drinking water, shade have to be provided
• The shelf of project for a village will be recommended by the gram sabha and approved by the zilla panchayat.
• At least 50% of works will be allotted to Gram Panchayats for execution
• Permissible works predominantly include water and soil conservation, afforestation and land development works
• A 60:40 wage and material ratio has to be maintained. No contractors and machinery is allowed
• The Central Govt. bears the 100 percent wage cost of unskilled manual labour and 75 percent of the material cost including the wages of skilled and semi skilled workers
• Social Audit has to be done by the Gram Sabha
• Grievance redressal mechanisms have to be put in place for ensuring a responsive implementation process

History [edit]

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MNREGA was launched on 2 February 2006 from Anantapur in Andhra Pradesh and initially covered 200 of the "poorest" districts of the country. The Act was implemented in phased manner; 130 districts were added from 2007 to 2008. With its spread to over 626 districts across the country, the flagship program of the UPA Government has the potential to increase the purchasing power of rural poor, reduce distress migration and to create useful assets in rural India. Also, it can foster social and gender equality as 23% workers under the scheme are Scheduled Castes, 17% Scheduled Tribes and 50% women. In 2010–11, 41 million households were employed on NREGA worksites.^{[citation needed]}

Funding [edit]

MGNREGA started with an initial outlay of $2.5bn(Rs113 billion) in year 2006–07.The funding has considerably been increased as shown in the table below:

Implementation [edit]

The Comptroller and Auditor General (CAG) of India, in its performance audit of the implementation of MGNREGA has found "significant deficiencies" in the implementation of the act. The plan was launched in February 2006 in 200 districts and eventually extended to cover 593 districts. 44,940,870 rural households were provided jobs under NREGA during 2008–09, with a national average of 48 working days per household.^[9] In recent times, NREGA workers have faced problems due to delays in payment of wages, some of which have been pending for months.^[10] In July 2012, the Government admitted that the programme is plagued with corruption and it needs to be dealt with meaningfully.^[11]

Employment under NREGAS in 2010

Indian Minister of State for Rural Development Pradeep Jain said in a written reply to a question in Rajya Sabha on Tuesday that As of 30 June, a total of 17,943,189 families in the country have been provided employment under MGNREGS.^[12]

Works/Activities [edit]

The MGNREGA achieves twin objectives of rural development and employment. The MGNREGA stipulates that works must be targeted towards a set of specific rural development activities such as: water conservation and harvesting, afforestation, rural connectivity, flood control and protection such as construction and repair of embankments, etc. Digging of new tanks/ponds, percolation tanks and construction of small check dams are also given importance. The employers are given work such as land leveling, tree plantation, etc. First a proposal is given by the Panchayat to the Block Office and then the Block Office decides whether the work should be sanctioned. In Rangareddy district manchal mandal the dry land horticulture and plantation of trees on the bunds of the fields taken up under MGVN programme is taken up in a big way.

Criticisms [edit]

Many criticisms have been levelled at the programme, which has been argued to be no more effective than other poverty reduction programs in India. The program is beset with controversy about corrupt officials, deficit financing as the source of funds for the program, poor implementation, and unintended destructive effect on poverty. A 2008 report claimed the state of Rajasthan as an exception wherein the rural population was well informed of their rights and about half of the population had gained an income from the entitlement program.^[13] However, a 2011 Wall Street Journal report claims that the program has been a failure. Even in Rajasthan, despite years of spending and the creation of government mandated unskilled rural work, no major roads have been built, no new homes, schools or hospitals or any infrastructure to speak of has resulted from the program.^[4]

At national level, a key criticism is corruption. Workers hired under the MGNREGA program say they are frequently not paid in full or forced to pay bribes to get jobs, and aren't learning any new skills that could improve their long-term prospects and break the cycle of poverty. There are also claims of fictitious laborers and job cards by corrupt officials causing so called leakage in program spending.^[4][14]

Another important criticism is the poor quality of public works schemes' completed product. In a February 2012 interview, Jairam Ramesh, the Minister of Rural Development for the central government of India, admitted that the roads and irrigation canals built by unskilled labor under this program are of very poor quality and wash away with any significant rains. Villagers simply dig new irrigation pits every time one is washed away in the monsoons. The completed works do not add to the desperately needed rural infrastructure.^[5][14]

The MGNREGA programme spent US$ 9 billion in the 2011 fiscal year according to official data. Economists have raised some concerns about the sustainability of this subsidy scheme – India’s fiscal deficit is expected to reach 5.6 per cent of GDP this year, compared with 5.1 per cent last year. The MGNREGA program has been found to distort labor markets and has helped — along with fuel and fertilizer subsidies — to balloon India's federal fiscal deficit.^[15][16]

Yet another criticism is the unintended effect of MGNREGA in terms of skill growth. A review published by India in September 2011 conceded that the lack of skilled technicians at almost every site under MGNREGA program, along with rules banning the use of machinery or contractors (labour is usually by shovel). Such bureaucratic regulations mean that the labourers learn no new skill, and that the ponds, roads, drains, dams and other assets built with manual labour are often of wretched quality. The idea behind MGNREGA program is to create as many jobs as possible for unskilled workers. But in practice, say critics, it means no one learns new skills, only basic projects get completed and the poor stay poor — dependent on government checks.^[4][5]

"We work because there's high unemployment here and the land is less fertile." But he questioned the point, saying "There's no meaning to it. Instead of this they should build proper roads."

— Abdul Jameel Khan, a farmer employed by India's MGNREGA entitlement program quoted in a 2011 article by The Wall Street Journal^[4]

A multi-million-Rupee fraud has also been suspected where many people who have been issued the NREGA card are either employed with other government jobs or are not even aware that they have a Job Card. The productivity of labourers involved under NREGA is considered to be lower because of the fact that labourers consider it as a better alternative to working under major projects. There is criticism from construction companies that NREGA has affected the availability of labour as labourers prefer to working under NREGA to working under construction projects.^[17]

It is also widely criticised that NREGA has contributed to farm labour shortage. In July 2011, the government has advised the states to suspend the NREGA programme during peak farming periods.^[18]

The National Advisory Committee(NAC) advocated the government for NREGA wages linkage with statutory minimum wages which is under Minimum wages act as NREGA workers get only Rs100 per day.^[19]

Wages in dry land agriculture in many parts of India are far below the wage provided at NREGS and no employer would or should (given current productivity) be willing to match this. This means that the government has created an "above market" and "above productivity" wage rate that could distort labor markets by creating incentives to move away from non-NREGS work in rural areas to NREGS work. This could not only retard non-farm job creation but sabotage incentives to upgrade skills and work hard. The safety net could easily become a hammock. This may not happen in near future and the decision could be reviewed but that is unlikely given the labor market program optics that makes them political one-way streets.^[20]

See also [edit]

• Nregs (Gujarat)
• The Minimum Wages Act, 1948

References [edit]

External links [edit]

• [2]
• Official web site of NREGA
• Official web site of NREGS, Andhra Pradesh
• Action for Employment Guarantee (resources and toolkits for organisations working towards realisation of entitlements under NREGA)
• Web site of the Right to Food Campaign, India (contains a wealth of material on the EGA)
• A primer to the NREGA
• Shovelling for their supper, 24 Apr 2008, The Economist
• Radio series on MGNREGA
• Battle for Work, The Hindu
• Official NREGA Operational guidelines – 3rd Edition
• [3]
• NREGA: Potential and Challenges