Why in the News?
The Union Finance Ministry has capped spending under the Mahatma Gandhi National Employment Guarantee Scheme (MGNREGS) at 60% of its total annual allocation for the first half of FY 2025-26.
About MGNREGS:
- Legal Foundation: MGNREGS is a rights-based Centrally Sponsored Scheme launched under the MGNREGA Act of 2005 to ensure the Right to Work for rural households.
- Origins:
- The idea of employment guarantee in India began with Maharashtra’s pilot, Employment Guarantee Scheme (MEGS), in 1965 under the V. Naik government.
- At the national level, the idea was first proposed in 1991 by then PM P. V. Narasimha Rao and later enacted in 2005.
- Employment Guarantee: It provides 100 days of wage employment per year to any adult willing to do unskilled manual labour in rural India.
- Legal Obligation: It is the first law in India that imposes a legal duty on the government to provide employment and compensate for non-compliance.
- Development Goal: The scheme aims to promote livelihood security, inclusive growth, and rural development.
Key Features:
- Statutory Right: Employment under MGNREGS is a legal entitlement, not just a welfare scheme.
- Eligibility: Any rural adult aged 18 or above can apply and must be offered work within 15 days.
- Proximity and Wages: Work must be provided within 5 km of the applicant’s residence with minimum wage, and delays attract compensation.
- Unemployment Allowance: If work is not provided on time, the state must pay an allowance.
- Demand-Driven Model: The scheme is worker-initiated, requiring the government to respond to demand.
- Transparency and Audits: Regular social audits and online updates ensure accountability in job cards, muster rolls, and fund use.
- Local Implementation: It is decentralised, led by Gram Panchayats, with support from block and state officials, and centrally funded.
- Women’s Inclusion: At least one-third of beneficiaries must be women, enhancing gender equity.
- Sustainable Assets: Projects focus on durable rural infrastructure like ponds, roads, canals, and plantations.
Rationale Behind the Spending Cap:
- Expenditure Control: This cap is part of the Monthly/Quarterly Expenditure Plan to prevent front-loading of funds and mid-year shortages.
- Previous Trends: In earlier years, over 70% of funds were spent by September, creating dues of ₹15,000–25,000 crore.
- Current Status: As of June 2025, 28% of the budget is already used, while ₹19,200 crore in dues remain from FY25.
- Criticism: Experts argue the cap undermines the demand-driven design of the act and may violate the legal right to work.
| [UPSC 2006] Consider the following statements in respect of the National Rural Employment Guarantee Act, 2005:
1. The Act provides 100 days of employment to households as a fundamental right. 2. Women are given priority such that half of the employment seekers are women. Options: (a) 1 only (b) 2 only (c) Both 1 and 2 (d) Neither 1 nor 2 * |
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