MGNREGA

About MGNREGA

The Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) scheme is the largest social security scheme in the world — guaranteeing 100 days of work each financial year to any rural household willing to do public work-related unskilled manual work at the statutory minimum wage.

The act makes it obligatory for the State to give rural households work on demand. In case such employment is not provided within 15 days of registration, the applicant becomes eligible for an unemployment allowance.
The Ministry of Rural Development (MRD) is monitoring the entire implementation of this scheme in association with state governments.

Key Features

One-third of the stipulated workforce must be women.
Work site facilities such as creche, drinking water and shade have to be provided.
The employment will be provided within a radius of 5 km: if it is above 5 km extra wage will be paid.
The wages are revised according to the Consumer Price Index-Agricultural Labourers (CPI-AL).
A 60:40 wage and material ratio has to be maintained.
Permissible works predominantly include water and soil conservation, afforestation and land development works.
Work site facilities such as crèche, drinking water, shade have to be provided.
Gram sabhas must recommend the works that are to be undertaken and at least 50% of the works must be executed by them.
Social Audit has to be done by the Gram Sabha.

Funding

Funding is shared between the centre and the states.
The funding pattern of the scheme comprises 100% funding for unskilled labour cost and 75% of the material cost by Central Government and rest shall be borne by the State Government.

Why in News?

The Centre’s flagship rural employment scheme- MGNREGA- has run out of funds halfway through the financial year.
According to its own financial statement, the MGNREGA scheme shows a negative net balance of ₹8,686 crore.

This means that payments for MGNREGA workers as well as material costs will be delayed, unless States dip into their own funds.
The MGNREGA is a demand driven scheme, guaranteeing 100 days of unskilled work to any rural household that wants it. During last year’s COVID-19 lockdown, the scheme was ultimately given its highest budget of ₹1.11 lakh crore and provided a critical lifeline for a record 11 crore workers.
However, the scheme’s 2021-22 budget was set at just ₹73,000 crore, with the Centre arguing that the nationwide lockdown was over and that supplementary budgetary allocations would be available if money ran out.
As on October 29, the total expenditure including payments due had already reached ₹79,810 crore, pushing the scheme into the red. Already, 21 States show a negative net balance, with Andhra Pradesh, Tamil Nadu and West Bengal faring the worst.

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