Ensuring MGNREGA lives up to its potential


From UPSC perspective, the following things are important :

Prelims level : Provisions of MGNREGA

Mains level : Paper 2- Issues and scope for improvement in MGNREGA

With migrant workers returning home, work demand under MGNREGA is bound to rise. Sensing that the government increased the allocation to MGNREGA. This article suggests some steps to make the MGNREGA more effective in catering to this surge in the wake of the pandemic. Some issues that plague the scheme are also examined at the end. So, what are the suggestion? and what are the issues? Read to know….

Acknowledgement of the importance of MGNREGA

  • The government made an allocation of an additional Rs 40,000 crore as part of the stimulus package.
  • This is an acknowledgement of the importance of MGNREGA.
  • 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.
  • This demand-based trigger enables the self-selection of workers and gives them an assurance of at least 100 days of wage employment.

Let’s put allocation in context of World Bank recommendations

  • Since 2012, an average of 18 per cent of the annual budgetary allocation for MGNREGA has been spent on clearing pending liabilities from the previous years.
  • Even this financial year began with pending wage and material liabilities of Rs 16,045 crore.
  • An allocation of Rs 1 lakh crore for FY 2020-21 would mean that approximately Rs 84,000 crore is available for employment generation this year.
  • This will still be the highest allocation for MGNREGA in any year since the passage of the law.
  • However, the allocation, which amounts to 0.47 per cent of the GDP continues to be much lower than the World Bank recommendations of 1.7 per cent for the optimal functioning of the programme.

Some immediate steps to ensure the MGNREGA lives up to its potential

  • First, state governments must ensure that public works are opened in every village.
  • Workers turning up at the worksite should be provided work immediately, without imposing on them the requirement of demanding work in advance.
  • Second, local bodies must proactively reach out to returned and quarantined migrant workers and help those in need to get job cards.
  • Third, at the worksite, adequate facilities such as soap, water, and masks for workers must be provided free of cost. For reasons of health safety, MGNREGA tools should not be shared between workers.
  • The government should provide a tool allowance to all workers — some states are already providing such an allowance.
  • Fourth, procedures for implementing MGNREGA must be simplified but not diluted.
  • The pandemic has demonstrated the importance of decentralised governance.
  • Gram panchayats and elected representatives need to be provided with adequate resources, powers, and responsibilities to sanction works, provide work on demand, and authorise wage payments to ensure there are no delays in payments.
  • Fifth, as per a study by the RBI, more than half the districts in the country are under-banked.
  • The density of bank branches in rural India is even more sparse.
  • At this time, payments need to not only reach bank accounts on time, but cash needs to reach the workers easily and efficiently.
  • The limited coverage of bank infrastructure in rural areas must not be made a hurdle.
  • Attempts to distribute wages in cash, sans biometric authentication, must be rolled out.
  • Sixth, there needs to be flexibility in the kinds of work to be undertaken, while ensuring that the community and the workers are the primary beneficiaries.

Issuse with MGNREGA

  • Over the last few years, MGNREGA had begun to face an existential crisis.
  • Successive governments capped its financial resources, and turning it into a supply-based programme.
  • Workers had begun to lose interest in working under it because of the inordinate delays in wage payments.
  • With very little autonomy, gram panchayats had begun to find implementation cumbersome.
  • Barring a few exceptions, state governments were only interested in running the programme to the extent funds were made available from the Centre.
  • Allocating work on demand, and not having enough funds to pay wages on time was bound to cause great distress amongst the workers and eventually for the state too.
  • As a result, state governments had begun to implement MGNREGA like a supply-driven scheme, instead of running it like a demand-based guarantee backed by law.

Consider the question “With migrant workers returning to villages in the wake of corona pandemic, demand for work is likely to increase. In light of this, discuss the utility of MGNREGA and challenges it may face.”


With nearly eight crore migrant workers returning to their villages, and with an additional allocation for the year, this could be a moment for the true revival of MGNREGA. A revival led by workers themselves.

Mahatma Gandhi National Rural Employment Guarantee Act, 2005

  • The Act aims at enhancing the livelihood security of people in rural areas by guaranteeing hundred days of wage employment in a financial year to a rural household whose adult members (at least 18 years of age) volunteer to do unskilled work.
  • The central government bears the full cost of unskilled labour, and 75% of the cost of material (the rest is borne by the states).
  • It is a demand-driven, social security and labour law that aims to enforce the ‘right to work’.
  • Ministry of Rural Development (MRD), Government of India in association with state governments, monitors the implementation of the scheme.

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