MAHATMA GANDHI NATIONAL RURAL EMPLOYMENT

GUARANTEE ACT: AN ANALYSIS

5.1 Economics

Submitted By:

Susmit Isfaq

UID: SM0116046

3rd Year, 5th Semester

Faculty-in-charge

Mrs. Dipakshi Das

NATIONAL LAW UNIVERSITY & JUDICIAL ACADEMY, ASSAM

5th November, 2018

Table of Contents

Introduction ................................................................................................................................ 3
1.1 Literature Review................................................................................................................. 4
1.2 Research Questions .............................................................................................................. 5
1.3 Scope And Objectives .......................................................................................................... 5
1.4 Research Methodology ........................................................................................................ 5
2.1 Background of MNREGA ................................................................................................... 6
2.1.1 International Labour Organisation and MGNREGA ........................................................ 6
2.1.2 GENESIS OF MGNREGA ............................................................................................... 7
2.2 Objectives of MGNREGA ................................................................................................... 8
2.2.1 National Rural Employment Guarantee Act 2005 ............................................................ 8
2.3 MGNREGA – Socio Economic Impact ............................................................................... 9
2.4 MGNREGA and Assam ..................................................................................................... 10
2.5 Drawbacks.......................................................................................................................... 12
2.6 Conclusion………………………………………………………………………………..13
2.7 Bibliography……...………………………………………………………………………14

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INTRODUCTION

The Mahatma Gandhi National Rural Employment Guarantee act or (MGNREGA) was
notified in India on September 2005 with a mandate to provide at least hundred days of
guaranteed wage employment in a financial year to every rural household whose members
above the age of eighteen years’ volunteer to do unskilled manual work. The main focus of the
act is to facilitate the social protection for the people living in rural India by providing
employment opportunities and therefore contributing towards the overall development of the
local people.

Rural India has seen numerous ups and downs since independence. Rural development has
been a crucial issue for states with large number of rural population as various programmes
were launched for the development of poor and marginal people living in rural areas. Role of
rural areas in development of the country like India needs no proof as it is evident from the
orientation of government policies that rural areas are acting as drive engines for growth of the
country. The government in the recent past has framed numerous schemes and programmes for
the development of rural areas of the country in order to tap the resources for betterment of
rural masses. The employment scheme like MGNREGA holds special importance for states
like Assam which has faced great challenges in development process because of its
geographical constraints. The development of states like Assam remain a matter of concern to
the policy makers as the people of the area face challenges like unemployment, poverty and
migration. The introduction of wage programmes like MGNREGA in the area have helped to
provide a thrust to the development process and can therefore be termed as a boon for the rural
people due to its demand oriented approach which makes the authorities responsible and as
well as accountable for providing employment to individuals. This paper tries to analysis the
aspects of MNREGA act and its socio economic impact in India, particularly in Assam.

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1.1 LITERATURE REVIEW
 Mahatma Gandhi National Rural Employment Guarantee Act,2005,
Government of India

After this act was legislated, the Mahatma Gandhi National Rural Employment Guarantee
Scheme came into existence. This act came into force in 2005 and from then giving
employment to many people from the rural part of India. This act contain provisions which
guarantees employment to the people who are economically and socially backward.

 MGNREGA A review of decent work and green job Published by International

Labor Organisation, 2016

This is a booklet published by the Indian office of the International Labor Organisation. This
booklet gives an overview of the Mahatma Gandhi National Rural Employment Guarantee
Scheme. It also mentions about the implementations in various parts. It is mainly statistic
centric and have many information related to the scheme.

 A Brief Scanning on Performance of Mahatma Gandhi National Rural

Employment Guarantee Act in Assam, India by Sanjay Kanti Das, American
Journal of Rural Development,2013

This is a research paper which contains informtions about Mahatma Gandhi National Rural
Employment Guarantee Scheme and its implementations. However, The paper has focused on
the State of Assam. It gives various data that proves that in Assam the scheme was not well
implemented. Various data has been used citing this paper.

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1.2 RESEARCH QUESTIONS
 What was the intention Mahatma Gandhi National Rural Employment
Guarantee Scheme?
 How well Mahatma Gandhi National Rural Employment Guarantee Act is
implemented?
 Drawbacks of the Mahatma Gandhi National Rural Employment Guarantee
Scheme.

1.3 SCOPE AND OBJECTIVES

 To analyse the Mahatma Gandhi National Rural Employment Guarantee
Scheme.
 To look at how Mahatma Gandhi National Rural Employment Guarantee
Scheme benefited Assam.

1.4 RESEARCH METHODOLOGY

The doctrinal approach has been adopted for the research of this project. The project
involves uses of secondary sources of information such as news articles, internet
articles, internet blogs etc. These have been used to critically analyse the Mahatma
Gandhi National Rural Employment Guarantee Scheme.

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2.1 Background of MNREGA

Evolving the design of the wage employment programmes to more effectively fight poverty,
the Central Government formulated the National Rural Employment Guarantee Act
(MGNREGA) in 2005. With its legal framework and rights-based approach, MGNREGA
provides employment to those who demand it and is a paradigm shift from earlier programmes.
Notified on September 7, 2005, MGNREGA aims at enhancing livelihood security by
providing at least one hundred days of guaranteed wage employment in a financial year to
every rural household whose adult members volunteer to do unskilled manual work. The Act
covered 200 districts in its first phase, implemented on February 2, 2006, and was extended to
130 additional districts in 2007- 2008. All the remaining rural areas have been notified with
effect from April 1, 2008. MNREGA was launched on February 2, 2006 from Anantapur in
Andhra Pradesh and initially covered 200 "poorest" districts of the country. The Act was
implemented in phased manner – 130 districts were added in 2007–08. With its spread over
625 districts across the country, the flagship program of the UPA Government has the potential
to increase the purchasing power of rural poor, reduce distress migration and to create useful
assets in rural India. Also, it can foster social and gender equality as 23% workers under the
scheme are Scheduled Castes, 17% Scheduled Tribes and 50% women. In 2010–11, 41 million
households were employed on NREGA worksites.

This act was brought about by the UPA coalition government supported by the left parties. Dr.
Jean Drèze, a Belgian born economist, at the Delhi School of Economics, has been a major
influence on this project. A variety of people's movements and organisations actively
campaigned for this act.

2.1.1 International Labour Organisation and MGNREGA

Within the framework of the achievement of decent work for all, the International Labour
Organization (ILO) has been supporting member countries, including India, to pursue the goal
of productive employment and decent work. With the launch of the Mahatma Gandhi National
Rural Employment Guarantee Act (MGNREGA) by the Government of India in February 2006
in 200 districts and its extension to all districts since April 2008, India is currently
implementing an ambitious programme that covers a rights-based approach to development,
income security to rural households through guaranteed wage employment, some check on

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distress migration from rural to urban areas and creation of durable assets.1 The ILO looks at
MGNREGA as an opportunity for value addition with the aim of promoting sustainable
livelihoods and decent work and addressing some key elements like gender issues, skills
development, social security, equity, and improved quality of life of workers and their children.
Another key emerging area of concern is environmental issues. ILO has launched the green
jobs initiative to mobilise governments, employers and workers to engage in a dialogue on
coherent policies and effective programmes leading to a green economy with green jobs that
contribute to environmental sustainability and decent work for all. Jobs created under
programmes such as MGNREGA fit well into the green jobs concept since majority of the
works under this programme relate to development/regeneration of water bodies, bio-mass,
water conservation, plantation and afforestation, horticulture and land development, and
rehabilitation/maintenance of rural infrastructure. The Government of India has a National
Action Plan on Climate Change (NAPCC). The Ministry of Labour and Employment,
Government of India has set up a multi-stakeholder task force to look into employment issues
relating to climate change and green jobs. The sub-group of this task force, in its meeting held
in August 2009, suggested a more detailed review of the type of works undertaken, in particular
of the social and environmental dimensions, as well as development of a systematic approach
to identifying the extent of 'green' and decent work under MGNREGA.

2.1.2 GENESIS OF MGNREGA

The need to evolve a mechanism to supplement existing livelihood sources in rural areas was
recognized early in development planning in India. The Government implemented workfare
programmes that offered wage employment on public works at minimum wages. The wage
employment programmes started as pilot projects in the form of Rural Manpower (RMP)
[1960-61], Crash Scheme for Rural Employment (CRSE) [1971-72], Pilot Intensive Rural
Employment Programme (PIREP) [1972], Small Farmers Development Agency (SFDA),
Marginal Farmers & Agricultural Labour Scheme (MFAL) to benefit the poorest of the poor.
These experiments were translated into a full-fledged wage-employment programme in 1977
in the form of Food for Work Programme (FWP). In the 1980's this programme was further
streamlined into the National Rural Employment Programme (NREP) and Rural Landless
Employment Guarantee Programme (RLEGP). Jawahar Rozgar Yojana (JRY) [1993-94],
Employment Assurance Scheme (EAS), Employment Assurance Scheme (EAS), The Jawahar

1
Booklet, MGNREGA A review of decent work and green jobs in Kaimur District in Bihar, ILO India,
Vol.2,2016

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Rozgar Yojana (JRY) was merged with Jawahar Gram SamriddhiYojana (JGSY) from 1999-
2000 and was made a rural infrastructure programme, The programme was merged with
Sampoorna Grameen Rozgar Yojana (SGRY) from 2001-02, and National Food for Work
(NFFWP) [2005].2 These wage employment programmes implemented by State Governments
with Central assistance were self-targeting, and the objective was to provide and enhance
livelihood security, especially for those dependent on casual manual labour. At the State level,
the Govt, of Maharashtra formulated the Maharashtra Employment Guarantee Scheme and
Maharashtra Employment Guarantee Act, 1977 to provide wage employment to those who
demanded it. Based on the experience of these programmes, the Mahatma Gandhi National
Rural Employment Guarantee Act (MGNREGA) was enacted to reinforce the commitment
towards livelihood security in rural areas.3

2.2 Objectives of MGNREGA

The National Rural Employment Guarantee Act (NREGA) aims at enhancing the livelihood
security of the people in rural areas by guaranteeing hundred days of wage employment in a
financial year, to a rural household whose members volunteer to do unskilled manual work.
The objective of the Act is to create durable assets and strengthen the livelihood resource base
of the rural poor. The choice of works suggested in the Act address causes of chronic poverty
like drought, deforestation, soil erosion, so that the process of employment generation is on a
sustainable basis.

2.2.1 National Rural Employment Guarantee Act 2005

Through this legislation, the government initiated the process to guarantee right to work to
citizens. The Act was later named after father of the nation, Mahatma Gandhi. The statute is
hailed by the government as "the largest and most ambitious social security and public works
programme in the world".4 In its World Development Report 2014, the World Bank termed it
a "stellar example of rural development".5

2
National Rural Employment Guarantee Act 2005 (NREGA) Report of the Second Year April 2006-March
2007/ Ministry of Rural Development Department of Rural Development (GOI)
3
Ibid
4
Ministry of Rural Development 2005, p. 10
5
Economic Times, retrieved from http://articles.economictimes.indiatimes.com/2013-10-
10/news/42902947_1_world-bank-world-development-report-safety-net

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The Act envisages the following:

• Enhance livelihood security of the rural poor by generating wage employment opportunities
in works that develop the infrastructure base of that particular locality.

• Rejuvenate natural resource base of the area concerned.

• Create a productive rural asset base.

• Stimulate local economy for providing wage employment.

• Ensure women empowerment.

The Act also seeks to create durable assets and strengthen the livelihood resource base of the
rural poor. The choice of works suggested in the Act address causes of chronic poverty like
drought, deforestation, soil erosion, so that the process of employment generation is on a
sustainable basis. The another significant objective of the MGNREGA is to arrest out the
migration of unskilled and landless labour force from rural areas to urban areas by ensuring up
to 100 days of wage employment within their native jurisdiction so that the 100 days guarantee
wage employment can be judiciously and rationally utilized by the landless peasants during
lean and distress seasons. One-fourth of the families surveyed opined that there is migration
from their respective village to towns/cities in search of job. Almost fifty percent of the House
Holds in western region expressed that migration is taking place from their villages. Contrary
to the general perception of better wages on migration, 70 percent of the beneficiaries revealed
that the migration is only for just wages and not for any better wages. This implies that there is
a distress migration for just minimum wages to eke out the livelihood and for survival rather
than for better wages. The 70-80 percent rural migrant people are expressing that the
outmigration is in search of work and meager wages rather than for better earnings which can
be viewed as a distress migration. They preferred to stay in their native village if there is enough
wage employment available locally.

2.3 MGNREGA – Socio Economic Impact

As we know, the act was bought to address the issue of Rural distress caused by myriads of
factors like agricultural distress, lack of employment, etc. among others. It guarantees 100 days
of work to every rural household.

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The programme completed a decade of its existence and has been under scrutiny for variety of
reasons. The programme has excelled on many fronts like reducing poverty, increasing rural
wages etc. but at the same time has been criticised for failure to create durable assets,
contributing to inflation etc. Some of these conclusion still remains disputed.

Nevertheless, the different social and economic impact could be understood by the following:6

Social Impact:

1)It assures the poor, especially marginal farmers, SCs, STs a life of dignity by assuring a
steady flow of income over a certain period.

2)Helps in breaking the vicious cycle of debt caused by lending from local moneylenders who
charge an exorbitant rate of interest.

3)Helps in taking the citizen ownership of the assets like ponds, embankments, roads created
as most of them are used by the rural families.

4)Is a step towards equitable development and would complement other programmes
concerning inclusive development.

Economic Impact:

1)It has helped in increasing the per capita income, although marginally, of rural households.

2)Important step towards financial independence, especially of women.

3)It freed the rural families from subsistence living and has assured extra money which could
be put to enhance their overall life standard.

2.4 MGNREGA and Assam

Assam, one of the major states of North-East India is also covered under MNREGA. In Assam,
the five tribal dominated districts i.e. Karbi Anglong, Kokrajhar, Dima Hasao, Lakhimpur and
Dhemaji were the beneficiaries of MNREGA in the first phase of implementation of the
Scheme (2006-07). The Scheme was extended to Barpata, Bongaigaon, Cachar, Darrang,

6
http://www.insightsonindia.com/2016/02/08/2-critically-analyse-social-economic-impact-mgnrega-rural-
households/

10
Goalpara, Hailakandi, Morigaon and Nalbari districts of Assam in 2007-08 and from 1st April,
2008 the Scheme was implemented in all the remaining districts of Assam. It is observed that
since the inception of MNREGA in Assam, there has been a welcome and widespread social
acceptance of the scheme and the scheme has received an overwhelming response from the
people living in the rural areas. Therefore, in this paper an attempt has been made to examine
the performances of MNREGA in Assam and this section basically deals with detail analysis
regarding performances of the MNREGA in Assam and other North Eastern States of India
during 2007-08 to 2011-12. The performances of MNREGA in Assam during 2007-08 to 2011-
12 have been presented in terms of physical achievements, financial performance, job card
issued and employment provided under MNREGA.7

It is reported by Ministry of Rural Development, 20138 that in the year 2011-12, Assam could
complete 9970 numbers of projects by creating equal numbers of rural assets. It is reported that
Sonitpur district of Assam could complete highest 2163 numbers of work, whereas Chirang
and Nalbari districts of Assam bottomed the list by completing one and seven works
respectively in the whole year. It is also reported (NEST Report, 2013)9 that out of ten
categories of works approved in the MGNREGA, 62% of works were competed only under
rural connectivity and drought proofing types. Only 19 works of Rajiv Gandhi Seva Kendra
was completed in Assam. In Assam 51964 numbers of works are running behind schedule, out
of which 48013 numbers of works are delayed by more than three months. 3094 numbers of
registered households in Assam are not given job cards even. Besides 2443 Job card holders
have not been paid the unemployment allowances.

7
Das, Sanjay Kanti. "A Brief Scanning on Performance of Mahatma Gandhi National Rural Employment
Guarantee Act in Assam, India." American Journal of Rural Development 1, no. 3 (2013): 49-61.
8
Ministry of Rural Development, Mahatma Gandhi NREGA-Report to the People, Government of India, New
Delhi. 2013.
9
Ibid

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2.5 Drawbacks
There is no doubt that MGNREGA is one of the most revolutionary legislation in the history
of modern India. Yet there exist several gaps which are creating hurdles in proper
implementation of the programme. These gaps act as barriers in proper implementation of the
scheme and thus restricts the outreach of the programme. The main bottlenecks are listed as:

Lack of awareness amongst rural masses is one of the main problem which stops us to call this
act is a successful one. It is found that the government is failure on their part in terms of
awareness among the common people. There are many people in rural India, who are till now
not aware of the benefits of MGNREGA. Another problem associated with MGNREGA is the
improper coverage area of the programme. It has failed to cover many rural areas from different
parts of India. Inability to identify right people as beneficiaries another failure of this act. It is
often said that MGNREGA has failed to identify who really needs it. People who can afford to
do any other work, are still getting paid through MGNREGA and deserving people are not
getting the chance. Hence, one needs to identify and tackle this important problem. Also, there
is no mechanism to assess performance of employees. Which leads to the problem that we are
unable to know whether the degree of payment and works done are same or not. Lack of
coordination amongst different agencies and scarcity of funds, formulation and design of

12
programme, lack of work professionalism amongst MGNREGA employees etc. are also
problems that is to be noted to improve MGNREGA. 10

But, apart from these, the root cause of all problem is corruption The whole system, from local
body level to central level is full of corrupted people. For which, the funds coming for
MGNREGA is going in the pockets of politicians and bureaucrats. This is making the whole
motive behind this legislation diluted and thus, weakening the system.

10
Bahuguna, Rahul & Pandey, Dr. Akhilesh & Soodan, Vishal. (2016). A STUDY ON SOCIO ECONOMIC
IMPACT OF MGNREGA ON BENEFICIARIES IN RUDRAPRYAG DISTRICT OF UTTARAKHAND-
INDIA. International Journal of Management and Applied Science (IJMAS). 2. 2394-7926.

13
CONCLUSION

There are very few opportunities in the village for work. The farmers are engaged in agriculture
work and the labourers are engaged to work in the field owned by the farmers. After the
implementation of MGNREGA in the village the labourers started to find opportunities of
working in the villages itself and many labourers who used to migrate to cities from the village
came back and started working in the Mahatma Gandhi NREGA. After the Mahatma Gandhi
NREGA, there is increase in employment opportunities (93.7 percent respondents reported) as
well as safe and secure employment. Several respondents said that MGNREGA has allowed
them to avoid working at a stone quarry, which was hazardous. Mahatma Gandhi NREGA
gives employment to the rural people, providing minimum wage employment to unskilled
labour especially during lean season. MGNREGA also serves as an effective safety net for the
unemployed especially during famine and drought.

As cited earlier, the employment guarantee scheme started in 2005 has given employment to
many people from the rural India after the act came into existence. The scheme is regarded as
one of the most well planned scheme. But a well-crafted scheme is of no use if its
implementation is not planned. At first, it was seen as a game changer in terms of its capacity
to generate employment. But after 18 years of its existence, sadly we have to say that the
performance is not up to the mark. It is solely because of the system which is mostly corrupt
and not well maintained. Due to lack of scrutiny the government officials from top to Panchayat
level has rotten the whole process.

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 BIBLIOGRAPHY

Book :

Reetika Khera, The Battle of Employment Guarantee, Published by Oxford University,2011

Other Sources:

 MGNREGA A review of decent work and green job by International Labor Organisation,2016
 Sanjay K. Das, A Brief Scanning on Performance of Mahatma Gandhi National Rural Employment
Guarantee Act in Assam, India, American Journal of Rural Development,2013

Websites :

 https://nrega.nic.in
 https://economictimes.indiatimes.com
 https://en.wikipedia.org/wiki/MGNREGA%27_Summit
 https://blog.mygov.in/editorial/nrega- -indian-employment-to-asean/
 https://www.hindustantimes.com/nrega.../story-YilZkNnzxVzcIlO3bRcY

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