Friday, 30 December 2011


       A  REVIEW
(This article was published in the "Kurukshtra, Jan 2011" - A Journal of Rural Development published by Govt. of India)
                                     -Dr. S. Vijay Kumar
                                                              Despite decades of planned development and poverty eradication programs at the national and state levels, poverty continues to persist in large scale in India. Employment opportunities help to achieve inclusive growth (i.e., growth with justice) in an economy. I have made an attempt in this direction to focus on MGNREGA. The National Rural Employment Guarantee Act (NREGA) has been a subject of lively debate today. It is considered as a better poverty eradication and employment program, when compared to previous programs. The Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) 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 who volunteer to do unskilled manual work. The National Rural Employment Guarantee Act was approved by the Indian Parliament in September 2005. This Act started functioning from 2nd Feb., 2006. Initially it was introduced in 200 districts of the country and later extended to another 130 districts in 2007-08. By 1st April 2008, it was further extended to 593 districts covering 4, 49, 40, 870 rural households. NREGA is renamed as ‘Mahatma Gandhi National Rural Employment Guarantee Act’ on 2-10-2009. The main aim of this Act is to enhance the purchasing power of rural people.
The salient features of MGNREGA are: 
a) Adult members of a rural household may apply for employment if they are willing to do unskilled manual work. At least 100 days work will be provided per household per annum. 
b) Such a household will have to apply for registration to the local Gram Panchayat in writing or orally.
c) The Gram Panchayat after due verification will issue a Job Card to the household. The Job Card will bear the photograph of all adult members of the household willing to work under NREGA.
d) All adults who have completed 18 years of age are eligible to work.  
e) Employment will be provided within 15 days of application for work.
f) Men and women will be paid equal wages and preference will be given to women in each work.
g) If employment is not provided within 15 days, daily unemployment allowance in cash has to be paid. Liability of payment of unemployment allowance is of the States.
h) At least one-third of persons to whom work is allotted have to be women.
i) Disbursement of wages has to be done on weekly basis and not beyond a fortnight and wages are credited directly to their bank/post- office account. 
j) Panchayat Raj Institutions have a principal role in planning and implementation.
    k) Each district has to prepare a shelf of projects. The selected works to provide employment are to be selected from the list of permissible works. The different categories of permissible works are as follows:
·        Water Conservation and water harvesting
·        Drought Proofing (including plantation and afforestation)
·        Irrigation canals including micro and minor irrigation works
·        Flood Control and Protection Works
·        Minor irrigation, horticulture and land development on the land of SC/ST/BPL/IAY and land reform beneficiaries
·        Renovation of traditional water bodies including desilting of tanks
·        Land Development
·        Rural Connectivity
                   The shelf of projects has to be prepared on the basis of priority assigned by Gram Sabha. At least 50% of works have to be allotted to Gram Panchayats for execution. A 60:40 wage and material ratio has to be maintained. Contractors and use of labour displacing machinery are prohibited.
l) Work should ordinarily be provided within 5 km radius of the village or else extra wages of 10% are payable
m) Work site facilities such as crèche, drinking water, shade have to be provided.
n) Social Audit has to be done by the Gram Sabha at least once in every six months.
o) Grievance redressal mechanisms have to be put in place for ensuring a responsive implementation process.
p) All accounts and records relating to the Scheme are to be made available for public scrutiny and to any person desirous of obtaining a copy of such records on demand and after paying a specified fee.
q) Those who violates the MGNREGA Act will be penalized with a penalty of rupees up to 1000/-
The Central Government bears the costs on the following items:
a) The entire cost of wages of unskilled manual workers.
b) 75% of the cost of material, wages of skilled and semi-skilled workers.
c) Administrative expenses as may be determined by the Central Government, which will include, inter alia, the salary and the allowances of the Programme Officer and his supporting staff, work site facilities.
d) Expenses of the Central Employment Guarantee Council.
The State Government bears the costs on the following items:
a) 25% of the cost of material, wages of skilled and semi-skilled workers.
b) Unemployment allowance payable in case the State Government, if it cannot provide wage employment on time.
c) Administrative expenses of the State Employment Guarantee Council.
Share of women in work force:
The Act stipulates that priority shall be given to women. In terms of implementation it mandates that a minimum of one-third of the beneficiaries are women who have registered and have requested for work. Women participation for FY 2008--09 was 48%. The highest women participation for FY 2008-09 was reported in Tamil Nadu (80%) and Kerala (84%) respectively.
Sl.No    Name of the State   Pre-revised wage rate        Revised wage rate
                                                     Rs. Per day                        Rs. Per day 

 1            Assam                                           100                            130
 2             Andhra Pradesh                           100                            121
 3             Bihar                                            100                            120     
 4             Gujarat                                        100                            124
 5             Haryana                                       141                            179
 6             Himachal Pradesh 
                Non-Scheduled Area                  100                              120
                Scheduled Area                          125                              150
 7             Jammu & Kashmir                    100                              121
 8             Karnataka                                  100                              125
 9             Kerala                                        125                              150
10            Madhya Pradesh                         100                              122
11            Maharashtra                               100                              127
12            Manipur                                        81                             126
13            Meghalaya                                   199                             117
14            Mizoram                                      110                             129
15            Nagaland                                     100                             118
16            Orissa                                            90                             125
17             Punjab                                  
17(a)                                                             100                            124
17(b)                                                             100                            124
17(c)                                                              100                           124
17(d)                                                              105                           130
18             Rajasthan                                      100                           119
19.            Sikkim                                           100                           118
20             Tamil Nadu                                   100                           119
21             Tripura                                         100                            118
22              Uttar Pradsh                                100                            120
23              West Bengal                                 100                            130
24              Chhattisgarh                                100                            122
25              Jharkhand                                      99                            120
26              Uttarkhand                                  100                             120
27              Goa                                              110                             138       
28             Andaman & Nicobar   
                 Andaman District                         130                             170
                 Nicobar District                            139                             181
29             Dadra Nagar Haveli                      108                             138
30             Daman & Diu                                102                             126
31              Lakshdweep                                 115                             138
32              Puducherry                                   100                             119
33              Chandigarh                                  140                              174  
Source: Ministry of Rural Development, Government of India 

       Share of SC/ST Households in Employment:
In terms of providing employment to members of SC & ST households in 2008-09 the figure stood at nearly 54.72%. In 15 states it was higher than the national average.
Supplementing Income:
Post-NREGA there has been a revision of minimum wages across the country. Average household earning have increased from Rs. 2795 in FY 2006-07 to Rs. 4060 in FY 2008-09. A major share of NREGA expenditure is as unskilled wage
Allocation of Funds to MGNREGA:
During the financial year 2006-07 Rs. 11000 crores, during 2008-09 Rs. 37397.06 crores, during 2009-10 Rs. 39100 crores, and during
2010-11 Rs. 40100 crores (while Rs.79387 were allotted during this financial year to rural development, more than 50% of this were allotted to MGNREGA) were allotted. 
Success Stories of MGNREGA:
·        Independent studies and research indicates that NREGA has aided in enhancement of agricultural productivity (through water harvesting, check dams, ground water recharging, improve moisture content, check in soil erosion and micro-irrigation), stemming of distress migration, increased access to markets and services through rural connectivity works, supplementing household incomes, increase in women workforce participation ratios, and the regeneration of natural resources.
·        MGNREGA is yielding better results when compared to earlier poverty eradication programs. In India, so far (13th June 2011) no. of households who have demanded employment under NGNREGA is 18520612 and no. of households provided employment is 17943189. Thus, there is a gap of 577423. Percentage age of SC participation 21.44, percentage age of ST participation 19.87, percentage age of women participation is 49.57, number of households availed 100 days of employment are 225857 and average person days per household is 24.47. (Person day means a unit of measurement based on an ideal amount work done by one person in one working day).
·        The wage rates under MGNREGA have been increased by the Ministry of Rural Development with effect from January 2011 in the wake of recommendations of National Advisory Council and in consultations with different Ministries. This will result in 17-30% enhancement across the country. This will benefit more than 5 crore beneficiaries under MGNREGA. Recently Govt. of AP increased the remuneration from Rs. 100/- per day to Rs. 121/- per day and the no. of days from 100 to 125 per annum.
·        The wage rates have been enhanced on the basis of Consumer Price Index for the agricultural labour calculated on the basis of Rs.100 or the actual wage rate, whichever is higher as on April 1st, 2009. The linking wages to CPI – Agricultural labuor will result in annual revision of the wage rates. The Government is awaiting for the report of the Pranob Sen Committee constituted to deliberate upon separate index for MGNREGA.     
·        This Act is performing better in Rajasthan, Andhra Pradesh, Chattisgadh, North Eastern States (for e.g. Tripura), Gujarath, Karnataka, and Tamil Nadu. It is not correct to say that this Act is not performed well in Kerala, but it is to say that there is less demand for works of MGNREGA.      
·        Recently (June, 2011), Andhra Pradesh, Rural Irrigation Minister D.Manikya Prasada Rao has agreed that 100 crores misappropriation of funds is true in MNREGA works and an enquiry will be made in to this.
·        There is a criticism that in some states, low wages are paid than the stipulated by the Act. According to the Supreme Court judgment this comes under ‘forced labour’.
·        If it is viewed economically, there is a fear that the allocation of funds to MGNREGA may exceed 5% of GDP.
·        Controller & Auditor General of India in its report have mentioned that funds are being misutilized in some states.
·        Public Works like land development works, afforestation, irrigation works, construction roads, flood control etc. are being carried out by wealthy sections of the society thus betraying poor sections for whom this Act. is meant.
·        Leader of opposition in Gujarat Assembly Shaktisinh Gohil had revealed that according to the information sought under Right to Information (RTI) Act, a three-year-old boy had been shown as beneficiary of MGNREGA in Kutch. He further said that the government register provides information about payment made to this minor.
·        At some places, it is observed that the workers have to wait months together for their wages and funds are being diverted for other purposes. It is observed that people have to pay Rs.50/- as bribe for their job card.
·        It is also noticed that most of the works are confined to papers only and quality is not being maintained.
·        The Supreme Court Bench headed by Chief Justice K.G.Balakrishnan, Justice Deepak Varma and Justice B.S. Chowan has commented that there is lack of uniform policy in case of MGNREGA and they have further commented that the funds are not reaching the eligible beneficiaries, except in some states.
·        Recently, the Andhra Pradesh High Court questioned seriously regarding the payment of less wages to MGNREGA workers, when compared to minimum wages in different states. It gave interim orders to the Central Government to correct it. It came to notice that in many states providing of employment for 100 days is not being fulfilled. During the last year on an average only 33 days employment is being provided under MGNREGA through out the country. ( MP, Orissa, Chattisghar, Rajasthan-50 days. West Bengal & Tamilnadu only 14-16 days).
·        In our state the target of providing employment to 22 lakh poor families under MGNREGA is not fulfilled (not even1/3 of it is fulfilled).   
·        There is conflict between Minimum Wages Act of 1948 and Section 6(2) of MGNREGA. According to the Minimum Wages Act, wages are to be revised for every three years on the basis of Consumer Price Index (CPI). Thus, minimum wages are increased remarkably in different states. But, contrast to this, the Section 6(2) of MGNREGA says that the wage paid to labourers should not increase a maximum of Rs.100/-
·        The Government of India is confined to Section 6(2) of MGNREGA, on the pretext that if Minimum Wage Act is implemented more funds are to be released to states. The Central Government said that if any state wishes to pay more than Rs.100/- it can, but from states budget only.
·        The AP High Court directed the Central Government to pay wages according to Minimum Wage Act in which states this Act is in vogue. Though, there is lot of scope for providing permanent utilities under the works of MGNREGA, there is no proof of such activities. It is advised that the government should come out of classical methods of works and try to adopt modern skills.  Sufficient number of works is not recognized to provide employment under MGNREGA. Even if recognized also, they are not implemented due to the negligence of authorities. In several states the works are confined to paper only. There is lot of misappropriation of funds and loop holes in public audit. In our state three thousand employees are suspended for misappropriation of funds. If more economic returns are there from this Scheme, the number of beneficiaries will increase.
·        In the absence of adequate banking services in rural areas in Jharkhand, some labourers sell their MGNREGA cheques to “middlemen” for a discount to get the money on the spot.
·        Recently (16-12-2010), expressing serious concern over faulty implementation of the government’s flagship programme, NREGA, in Orissa, the Supreme Court asked the centre and the state government to explain with in four weeks why a CBI probe should not be ordered into the irregularities.
·        Recommendations:
·   There should be a proper training for the MGNREGS     employees.
·        There should be a awareness programs for the workers, as whatever mistakes were found it was because of unawareness among the workers.
·        These awareness programs can be associated with SARVA SIKHSHA ABHIYAAN, and night schools can play an important role in this program.
·   There should be a transparency and accountability at every stage of MGNREGS.
·        Government should form auditing agency at Panchayat level and it should consist of not only the government officials but some other agencies and NGOs.
·        Percentage share of the government officials in schemes must be stopped immediately.
·        The block/Mandal offices should be closed down and a direct link should be established between district headquarters and the Gram Sabhas. The Gram Sabhas must be given the right of issuing job cards, preparation of muster rolls, planning, implementation and monitoring of the schemes.
·        A strong legislation needs to be brought with the provisions of severe punishment as dismissal from the service, imprisonment and recovery of grabbed money with ten times penalty. There should be also a special court, which can sort out the matters in time bound manners.
·        Corruption is the most serious issue in MGNREGA, which is prevalent at every level. The share is fixed for the government officials in each scheme and misappropriation of fund is going on shamelessly across the country.
·        Interestingly, the Legislative, the Executive and the Judiciary, all are aware about the rampant corruption in MGNREGA but none of these working to bring back the MGNREGA on the right track. The Chief Justice of the Supreme Court, Justice K.G. Balakrishnan says, “NREGA is under the clutch of middle men.”
·        The wage is paid to the labourers through the Bank accounts but contractors and middle men comfortably get their share. The schemes are also not accomplished properly but the full amount is released without proper verification. The labourers are also asked to pay for the job cards. Hence, there is a check post of loot in each turning-point of MGNREGA.
·        MGNREGA should be coordinated with agriculture.
It is good that Ministry of Rural Development has announced the government’s plan to roll out NREGA II. This version of the project is expected to be more efficient since it eliminates its main shortcomings and deficiencies.
To conclude, though they are some shortcomings like misappropriation of funds at some places, yet this Act is really a boon for rural people. If it is implemented transparently, corruption will be eradicated and enhances the standard of living of the rural people.     

1. Sreelatha Menon – NREGA should have a coherent wage policy,
    March 14, 2010, Business Standard.
2. Implementing NREGA– Ministry of Rural Development.
3. Status of NREGA Implementation grassroots of learning and way forward
4. Jayanti Ghosh – The NREGA and its Critics
5. Report to the People, Ministry of Rural Development Feb.2010.
6. Indian Express: 17-12-2010.

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