Nearing its twentieth anniversary, the Mahatma Gandhi National Rural Employment Guarantee Scheme(MGNREGS) is a symbol of India’s dedication to social welfare and inclusive development in rural areas. The MGNREGS was enacted in 2005 to change the rural landscape by providing a safety net of guaranteed wage employment to rural households in need, thereby empowering them to escape the vicious cycle of poverty. Despite its laudable objectives and initial success the program now faces scrutiny, with concerns raised about its effectiveness, implementation challenges, and management issues. What once symbolised hope for millions now demands critical examination to address lingering operational concerns.
MGNREGS offers opportunities for wage employment at the stipulated minimum wage for unskilled manual labour, guaranteeing rural households 100 days of wage employment annually. 250 million registered workers currently benefit from the provisions of this essential programme, which provides support to a significant portion of the rural population. MGNREGS proved to be an invaluable lifeline for many rural residents during the COVID-19 pandemic, especially when migrants started to return home and the economy was forced to shut down.
The allocation of funds for MGNREGS has displayed a pattern of irregularity over time. Most of the initial allotment tends to run out six or eight months into the Financial Year (FY), which results in fewer work opportunities and extended wage payment delays in the second half of the FY. Studies showed a sizable unmet demand for work during the pandemic, despite a record-high budget allocation. The MGNREGS budget has shrunk over the last two fiscal years, reaching even lower levels than before the pandemic. Although there was a significant increase of 25% between FY 2008–09 and FY 2009–10, after FY 2011–12, funds experienced a sharp decline. Funds continued to decline in FY 2020–21 despite a steady increase from FY 2014–15 to FY 2019–20. Moreover, the financial strain has been made worse by growing outstanding liabilities as a result of payment delays. The problem is further exacerbated by the addition of new projects without their completion. Only about 2% of households with working members had worked 100 days in the fiscal year 2023–2024 as of January 2024. The average number of days worked was below 50, the lowest level in the previous five years. The upcoming fiscal year allocates Rs 86,000 crore for India’s rural jobs guarantee program.
The Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) implementation performance of Indian states highlights the importance of state capacity and commitment. Despite having little financial resources, Chhattisgarh stands out for its dedication, successfully using civil society involvement to increase public awareness. Political opposition in Rajasthan hampered the initial success of social mobilisation, which reduced trust and demand for labour. West Bengal’s political rivalry encourages expenditure, but Andhra Pradesh’s technocratic strategy, which sidesteps local leadership, produces excellent job results. Bihar and Gujarat emphasise the significance of stakeholder collaboration and how local power dynamics impact programme success.
The Centre announced a 3–10% increase in MGNREGS wage rates for FY 2024–2025 ahead of the general elections. Goa ranks first with an increase of Rs 34 per day (10.56%), followed by increases in Karnataka (10.44%), Andhra Pradesh (10.29%), and Telangana (10.29%). The three states with the lowest hikes were Uttar Pradesh, Uttarakhand, and Nagaland. At 3.04% apiece, Uttar Pradesh and Uttarakhand had the lowest percentage increases. In FY 2024–2025, the average daily wage is approximately Rs 284 as opposed to Rs 267 from the previous year. The question of whether the wage rate is still sufficient and fair, despite the increase, still stands.
The transition in budgetary allocation for MGNREGS reveals financial strain and shifting priorities. Overspending highlights the scheme’s critical role in rural employment and livelihood security, yet declining budget allocations raise concerns about the government’s commitment to its sustainability.
Improving MGNREGS’s efficacy and relevance is imperative going forward. To guarantee sustainable employment, this entails incorporating skill development and broadening the range of jobs available, such as forestry and tourism initiatives. To solve issues and use the available resources, stakeholders must collaborate, monitor technology, and improve transparency.
https://prsindia.org/policy/report-summaries/critical-evaluation-of-mgnrega
https://idronline.org/article/livelihoods/mgnrega-all-you-need-to-know/
https://www.effective-states.org/wp-content/uploads/briefing_papers/final-pdfs/esid_bp_1_NREGA.pdf
https://www.counterview.net/2023/10/gois-2023-24-nrega-allocation-lowest.html
https://thewire.in/labour/mgnrega-wages-revised-fy-2024-25-released-haryana-highest
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