What is MGNREGA scheme?

The Economic Advisory Council to the Prime Minister, led by Chairman Bibek Debroy, recently suggested that the government should come out with a guaranteed employment scheme for the urban unemployed as well as introduce a universal basic income and allocate higher funds towards the social sector to reduce inequality in India.

It said that looking at the difference between the labour force participation rate in rural and urban areas, the urban equivalent of schemes like MGNREGA that are demand-based and offer guaranteed employment should be introduced so that the surplus labour is rehabilitated.

The government of India had passed the Mahatma Gandhi National Rural Employment Guarantee Act, 2005 in September 2005. 

The mandate of MGNREGA is to provide at least 100 days of guaranteed employment in a financial year to every rural household whose adult members volunteer to do unskilled manual work at the statutory minimum wage.

The Ministry of Rural Development (MRD) monitors the implementation of the scheme in association with state governments. This Act was introduced with an aim of improving the purchasing power of the people living in rural areas. Primarily semi or unskilled work was given to people living below the poverty line in rural India.

Adult members of rural households submit their name, age and address with a photo to the Gram Panchayat, which registers households after making enquiries and issues a job card. The job card contains the details of the adult member enrolled and his /her photo.

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The registered person can submit an application for work in writing (for at least fourteen days of continuous work) either to Panchayat or to Programme Officer. The employment will be provided within a radius of 5-km. And if it is beyond 5-km, extra wage will be paid.

A majority of the works that are notified under MGNREGA are related to agricultural and allied activities, besides the works that facilitate rural sanitation projects in a major way.

MGNREGA is a demand-driven wage employment programme and resource transfer from the Centre to the states is based on the demand for employment in each state.

It provides a legal guarantee for wage employment by providing allowances and compensation both in cases of failure to provide work on demand and delays in payment of wages for work undertaken. 

The process of reviewing official records and determining whether state reported expenditures reflect the actual monies spent on the ground is called the social audit.

It includes an audit of the quality of works being executed at different levels along with the details of disbursements made, the number of labourers employed and materials used. The people in coordination with local administration conduct the social audits, whose objective is to ensure public accountability.

In FY22, the Centre had budgeted Rs 73,000 crore for MGNREGA but ended up spending almost Rs 98,000 crore due to continued robust work demand.

For this fiscal, the government has allocated Rs 73,000 crore for the scheme in the Budget. More than 2.4 crore households are seeking work under MGNREGA and the number of active workers stands at 14.89 crore.