Great Lakes Institute of Management
Is it resulting in the intended outcomes?
What is the Act?
The Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) was passed in Parliament in 2005 and has been one of the flagship projects of the ruling Congress-led UPA coalition. The Act was put into place to provide 100 days of guaranteed employment in a financial year to any adult who asks, and who is willing to do unskilled work. The intended beneficiaries of the Act were the poor. It was almost entirely on the basis of the popularity of this concept that the UPA government won its re-election in 2009.
The objectives of the ...view middle of the document...
The way the Act is implemented is actually quite organized and efficient, as long as the processes involved are not hijacked by corrupt individuals with ulterior motives. Adult members of a rural household may apply for work with their local Gram Panchayat. While priority for work is given to women, nobody is turned away. If the government is unable to provide work within 15 days of applying, it will pay the applicant an unemployment allowance.
Following the verification of the residence and age of the applicant, registered households (households form the unit of registration) are issued a job card. This job card is the key to all the records regarding employment, location, wages and any other work-related information pertinent to the worker. Once the job card is issued, a written application is required to be made to the Gram Panchayat detailing the duration of the work sought. The guarantee is that work is to be provided within 15 days of application, failing which the unemployment allowance as per the Act will be paid.
The work itself has to meet several criteria. The first is that it has to be provided within 5 kilometers of the applicant’s village. In case work is only available outside this distance, then the applicant is to be provided 10% extra wages to cover any extra transportation costs that might be incurred.
According to the Act, wages are to be paid in accordance with the state-wise government notified wage rates. In addition, wages are to be paid on a weekly basis. No payments are to be made in cash, presumably in a bid to avoid leakages in the system and corruption—wages are paid directly to the beneficiaries’ bank account or post office account. Hence, an additional advantage of the MGNREGA is that bank coverage increases leaps and bounds.
Yet another advantage of the MGNREGA is that all decisions regarding what works are to be undertaken in a financial year are to be taken in open assemblies at the Gram Sabhas and ratified by the Gram Panchayats.
As far as cost-sharing goes, the government bears 100% of the cost of unskilled labour and 75% of the material cost, which includes the wages of semi-skilled and skilled workers.
Since the aim of the Act is to provide employment, the Act mandates that the ratio of wage expenditure to material expenditure should be 60:40. This ensures that labour is used, rather than contractors and machinery.
Review of Literature
There have been several reports and articles written on the MGNREGA, but most of them deal with only the implementation and aims of the Act. There are only a few authors who have delved into the problems with the implementation of the Act, and most of their work has been published in leading newspapers.
As such, this paper analyses data from MGNREGA Sameeksha: An Anthology of Research Studies on the MGNREGA 2006-12 released by the Ministry of Rural Development. MGNREGA Sameeksha analyses the Act and its implementation in terms of person-days of work provided,...