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NREGA: Mahatma Gandhi National Rural Employment Guarantee Act

Updated on: 03 Mar, 2023 12:22 PM

Our economy has been going through the problem of unemployment and joblessness since Independence. Joblessness has often resulted in rural distress forcing people to leave their houses and migrate to urban areas in search of jobs. The Government of India launched various schemes to help the rural poor. They launched Sampoorna Grameen Rozgar Yojana (SGRY) in 1999 and the National Food for Work Programme in 2004. The main objective of these schemes was to provide supplemental wages to the rural poor to help them fulfil their basic needs. Mahatma Gandhi National Rural Employment Guarantee Act (MNREGA) was amongst these welfare schemes. National Rural Employment Guarantee scheme was convened in 2005 and was launched as MNREGA in 2006. To know more about NREGA, delve into the content mentioned below.

What is NREGA or MNREGA? How they are different??

MNREGA is an acronym for Mahatma Gandhi National Rural Employment Guarantee Act. MNREGA was launched as the National Rural Employment Guarantee Act (NREGA) but was later renamed to Mahatma Gandhi National Rural Employment Guarantee Act by the then Prime Minister, Manmohan Singh. This scheme was officially launched in September 2005 and was successfully implemented on 2nd February 2006. The responsibility of this scheme is shared equally between the state and the centre. The central government provides for the wages of the unskilled manual labour along with 75% of the material cost which also includes the wages of the skilled and semi-skilled workers. This scheme was implemented in three different phases: Phase I, Phase II, and Phase III.

The Objectives of NREGA

In addition to just employment generation the major objectives of NREGA scheme are:

  • It mandatorily provides unskilled manual work for 100 days to every household in the rural area in a financial year. It leads to the creation of productive assets which matches the standard durability and quality.
  • This scheme also tries to include the rural poor in society, leading to social inclusiveness.
  • It is also responsible for strengthening the Panchayati Raj Institutions.
  • Providing a source of livelihood to the rural poor.
  • Projects implemented under this scheme are focused on the development of the agricultural sector. Issues such as deforestation, drought, soil erosion are taken up for rural projects as they often contribute to downtrodden conditions of the people. This act aims at increasing the natural resource base on which the majority of the rural population is dependent. If the scheme is implemented in a well-planned manner, it could change the poverty scenario.
  • The scheme is based on the principles of democracy and transparency.
  • It is a demand driven scheme. The resources are transferred to this scheme when there is a demand for employment.

Features of the NREGA Act:

  • Decentralised Planning: village administration plays an important role in planning, implementing, and monitoring the scheme. The local council or the Gram Sabhas have the responsibility of allotting work and the Gram Panchayats are responsible for executing 50% of the work.
  • Structure of the scheme is based on rights:this scheme covers Right to work, Right to employment, and Right to wages.
    • Right to work: provides up to 100 days of employment to the rural households
    • Right to employment: if your employment application isn’t responded within 15 days, then you are entitled to unemployment allowance
    • Right to wages: within 15 days, you are provided with your employment/unemployment wages
  • On-site facilities: employees are entitled to clean drinking water, first aid service, shades, and a nursery where infants and young children of the employees can spend time.
  • Labour intensive scheme: machinery used to displace labour won’t be allowed on the project site. Additionally, labour and the material ratio should adhere to the set ratio of 60:40.
  • Policies for transparency: regular social audits done by the Gram Sabha, grievance redressal system, public advocate responsible for safeguarding the interests of the public, and citizen information boards.
  • Uplifting women: the NREGA scheme has a clear mandate that women should account for at least ⅓ of the beneficiaries.
  • Wages: men and women are entitled to equal pay under this scheme.
    • Wages of the state’s agricultural labourers are paid in accordance with the Minimum Wages Act 1948. If the centre is deciding the wage rate of the workers, it cannot be less than Rs. 60 per day.
    • Wages are calculated according to the daily rates. Workers should get their wages on a weekly basis and the disbursement cannot be delayed more than a fortnight.

Administrative Structure of the NREGA scheme

One of the main features of the scheme is decentralised planning. Every stakeholder has an important role to play in the management and implementation of the scheme. The administrative structure of the scheme is mentioned below. As you know, the chart has been made in descending order, moving from the highest authority to the lowest one.

Stakeholders under NREGA scheme

The stakeholders are responsible for implementing the scheme effectively. In the section below, a detailed explanation of the roles and responsibilities of all the stakeholders under NREGA scheme is discussed.

Key stakeholders at various levels along with roles and responsibilities:

  • Village Level: at this level, we have three different stakeholders:
    • Wage seekers
    • Gram Sabha
    • Gram Panchayat
  • Block level: this level consists of two different stakeholders:
    • Intermediate Panchayat
    • Programme officer
  • District level: two different stakeholders are present at this level:
    • District Panchayats
    • District Programme Coordinator
  • State level
    • State Employment Guarantee Council
  • Central level: two stakeholders at this level:
    • Central Employment Guarantee Council
    • Ministry of Rural Development

Wage seekers – Village Level Stakeholder under NREGA Scheme

Wage seekers or workers are the primary stakeholders of this scheme. Their demand for work is responsible for initiating several processes. The workers are entitled to several rights which are:

  • Registration application
  • Getting a Job card
  • Work application
  • Disbursement of wages within 15 days of work completion.
  • Can choose the preferable time and duration for employment.
  • Work allotment within 15 days of the application.
  • Onsite facility of drinking water, caretaker, shades, and medical facilities.
  • Can seek employment information displayed on their job cards and can check the muster rolls at their convenience.
  • Can demand unemployment allowance if employment is not provided within the prescribed time limit.

Gram Sabha – Village Level Stakeholder under NREGA Scheme

Under the NREGA scheme, the Gram Sabha is entitled to the following rights and responsibilities:

  • It has the responsibility of distributing work under this scheme.
  • Also responsible for conducting social audits on the implementation of the scheme.
  • It has also been suggested that the Gram Panchayat be used as a forum for spreading information about the act.

Gram Panchayat – Village Level Stakeholder under NREGA Scheme

Gram Panchayat is responsible for the implementation of the scheme at the village level. The local bodies/organizations will be allotted responsibilities as deemed necessary by the state.
The list of the activities Gram Panchayat is responsible for is mentioned below:

  • Planning and structuring the work
  • Accepting applications for registration under the NREGA scheme
  • Verifying and approving the received applications
  • Registering households willing to work
  • Issuing Job cards after approving the applications
  • Accepting applications for employment/work
  • Releasing dated receipt
  • Extending employment to the worker within 15 days from the date of receiving the application
  • Executing the projects taken up under MNREGA
  • Preserving and maintaining the employee records
  • Gram Panchayat is also responsible for convening Gram Sabha for conducting social audits

Intermediate Panchayat – Block Level Stakeholder under NREGA Scheme

The major responsibility of the Intermediate Panchayat is to consolidate all the plans of Gram Panchayat into a block plan. It is also responsible for monitoring and supervising the plans operational at Gram Panchayat.

Programme Officer – Block Level Stakeholder under NREGA Scheme

These act as a coordinator at the block level for the scheme and is accountable to the District Programme Coordinator. A major responsibility of the Programme officer is to ensure that people are getting employment within 15 days of applying for employment. Other important duties of a programme officer are:

  • Analysing the development plan created by the Gram Panchayats
  • Consolidating the plans proposed by the Intermediate Panchayat
  • Unify all the plans into the block plan and forwarding the unified proposal to the Intermediate Panchayat
  • Balancing the demand for work with employment opportunities at the block level
  • Administering and watching the rightful implementation of the NREGA scheme
  • Addressing the worker’s complaints
  • Making sure that Gram Sabha is conducting social audits and doing a follow-up on them
  • If employment is not provided to the workers, then the responsibility of disbursing the unemployment allowances falls with the Programme Officer

District Panchayats – District Level Stakeholder under NREGA Scheme

These are responsible for polishing the labour budget and district proposals. They are also responsible for administering and overlooking the implementation of the scheme at the district level.

District Programme Coordinator – District Level Stakeholder under NREGA Scheme

District programme coordinator can be the Chief executive officer of the District Panchayat / District Collector / District Level Officer of an appropriate rank selected by the state government. At the district level, the responsibility for implementing the scheme as per the guidelines lies with the District Programme Coordinator. Other responsibilities of the coordinator are:

  • Disseminating information about the scheme
  • Providing training
  • Centralising the block plans into district plans
  • Releasing the funds and ensuring proper utilisation of the funds
  • Preparing and submitting progress reports on a monthly basis
  • Ensuring the supervision of plans and verification of muster rolls
  • The shelf of work requires technical and administrative approvals and it is the responsibility of the District Program Coordinator to ensure approvals within the time frame

State Employment Guarantee Council – State Level Stakeholder under NREGA Scheme

This council is set up by the state government under section 12 of the National Rural Employment Guarantee Act (NREGA). The council is responsible for advising the state government on implementing, monitoring, and evaluating the scheme. The state council is also responsible for deciding the projects which can be implemented under this scheme. It also prepares the recommendations/proposals which can be submitted to the central government under schedule I Section 1 (ix) of the Act. It is also responsible for preparing reports on the implementation of the scheme on an annual basis. These reports are then submitted to the state legislature.
Even the state government is responsible for certain things like:

  • Setting up the State Employment Guarantee Council
  • Communicating with people about the NREGA scheme
  • Setting up a State Employment Guarantee Fund
  • Making sure that the appointed personnel for the scheme are working towards implementing the scheme. Appointed personnel like Gram Panchayat Assistant, Programme Officer, and the technical staff
  • Releasing the state’s share in NREGS (National Rural Employment Guarantee Scheme) on time
  • Also responsible for giving administrative and financial authority to the District Programme Coordinator and the Programme Officer. Autonomy shall be allotted for carrying out the roles and responsibilities effectively
  • Extending administrative training to the workers
  • Also responsible for setting up agencies to ensure the quality of the work undertaken and to extend technical support
  • To regularly review, administer, and supervise the processes and their respective outcomes
  • Adhering to the policies of accountability and transparency at all operational levels

Central Employment Guarantee Council – Central Level Stakeholder under NREGA Scheme

This council is generally set up under the command of the Minister of Rural Development. The major objective of this council is to update the central government on the matters related to the NREGA scheme and ensuring proper implementation at all levels. Like state council, the central employment guarantee council is also responsible for preparing reports on the implementation of the scheme on an annual basis to be submitted to the parliament.

Ministry of Rural Development – Central Level Stakeholder under NREGA Scheme

Ministry of rural development is the highest authority responsible for the implementation of the NREGA scheme. Resources required by the state council and central council for the implementation of this scheme are sanctioned by the Ministry of Rural Development. Regular monitoring, supervising and analysis of the scheme is done by the Ministry. It is the Ministry’s responsibility for administering and operating the Management Information System (MIS). This system is used for saving and tracking data/information related to the implementation of the scheme. This system also sets indicators through which the performance of the scheme can be calculated. The ministry is also responsible for developing and supporting technology which might be helpful in attaining the objectives of the National Rural Employment Guarantee Act (NREGA) and to make the interface more accessible and user-friendly. It also makes sure that all the organizations/institutions related to the management of the scheme are adhering to the principles of transparency and accountability.

Understanding the Additional Administrative Support under NREGA scheme

For the effective implementation of the scheme, the Act issued guidelines for the state government to provide the Programme Officer and District Programme Coordinator with essential human resource and technical support. For this, the Ministry of Rural Development proposed an administrative plan that could be adopted by the states. The management staff will seek full funding from the Government of India. List of the additional management support is mentioned below:

  • Gram Rozgar Sahayak / Employment Guarantee Assistant:At the Gram Panchayat, the implementation of the MNREGA scheme can be a tedious process as the Gram Panchayat is endowed with several responsibilities. To ensure the proper disposal of the duties of the Gram Panchayat, an ‘Employment Guarantee Assistant / Gram Rozgar Sahayak’ is appointed in every Gram Panchayat. The performance review of the GRS is taken by the Programme Coordinator and the District Programme Coordinator.
  • Employment Guarantee Commissioner:An officer not below the rank of a Commissioner is appointed as the ‘Employment Guarantee Commissioner’ by the state. The main responsibility of the commissioner is to carry out all the responsibilities and activities essential to fulfilling the objectives of the Act. The commissioner could also act as the secretary of the State Employment Guarantee Council and could hear complaints against the District Programme Coordinator and act upon them accordingly. He/she is also responsible to ensure that public accountability instruments like applications under the right to information, grievance redressal system, and social audits are working and responding to the complaints and grievances of the public and the workers.

Areas covered by the NREGA scheme of the Government of India

The table below explains the coverage along with a time frame for the implementation of the scheme.

Phases Date Districts
Phase I 2nd February 2006 200
Phase II FY 2007-2008 Additional 130 districts
Phase III 1st April 2008 Remaining districts

This scheme has covered almost all the districts except those with 100% urban population.

Planning for MNREGA

Planning for the implementation of the scheme is a crucial aspect. One major factor which contributes to the success of the scheme is the timely generation of employment opportunities. Timely generation of the work requires advance planning and generation of work which can be offered when the demand for work comes.
Two types of plans are developed for the effective implementation of the scheme:

  • District perspective plans
  • Development Plans

District perspective plans

These plans are prepared for the duration of 5 years by the District Administration. This plan comprises of the areas which are in need of developmental projects. Keeping these areas in mind, suitable plans are proposed. The act clearly states, “creation of durable assets and strengthening the livelihood resource base of the rural poor shall be an important objective of the scheme”. A district plan consists of all these features:

  • Planning is village centric
  • Covers all aspects related to the management of natural resources along with the socio-economic infrastructure requirement
  • Also covers poverty analysis
  • Approves the projects which can be initiated under the NREGA scheme
  • Develop strategies that could be helpful to achieve the outcome
  • Use methods that could be used to analyse the outcomes
  • Overview of the ongoing projects and provide additional assistance if required

Developmental projects

Gram Panchayat is responsible for preparing these projects. Preparation of labour budget also falls under this category. Under this project, Gram Panchayat is also responsible for maintaining the shelf of work. This should then be forwarded to the Programme Officer for analysis and necessary approvals. This plan consists of the components mentioned below:

  • Inspecting the labour demand
  • Selecting suitable work to meet the labour demand
  • Calculating the cost of the projects and the workers’ wages
  • Expected results due to the generation of employment and improvement in the natural/physical resources

Projects to be undertaken in NREGA

Projects contributing to rural development or maintaining natural resources are to be undertaken under NREGA. Check the list of work below which can be taken under this scheme:

  • Projects related to the management of natural resources
  • Projects related to the conservation of water like water harvesting
  • The projects for averting drought-like situations like afforestation and planting trees
  • Undertaking land development projects
  • Extending agricultural facilities like irrigation facilities, horticulture, the plantation system
  • Connecting rural areas for access throughout the year

Initiatives undertaken to maintain transparency under NREGA scheme

NREGA (MNREGA) has taken up a series of initiatives for the proper disposal of the scheme along with maintaining transparency. A brief explanation of the initiatives is mentioned below. For a detailed explanation, you can refer to the official website of NREGA.

  • Management Information System: it is a comprehensive transaction-based information system which is available in the public domain.
  • Direct Benefit Transfer: linking aadhaar to the bank accounts for direct payments.
  • NeFMS (National Electronic Fund Management System): as the name suggests, this system was introduced in 2016 to manage the fund flow.
  • Geo MGNREGA: tagging MNREGA assets with the help of space technology.
  • JanMGNREGA mobile app: can be used to collect feedback on the MGNREGA assets launched and tagged via space technology.
  • National level monitors: also known as ‘common review mission’. These committees are set up to monitor the implementation of the scheme. Field visits are conducted for the same and observations are recorded which are later shared with the states and the union territories.
  • Field visits by MoRD (Ministry of Rural Development): field visits to the state to supervise the implementation of the NREGA scheme.
  • Internal Audits: Ministry of Rural Development conducts internal audits on a regular basis.
  • Model Case records: guidelines have been established on the maintenance of model case records after consulting with the states and the union territories.
  • Installing of Citizen Information Board: to adhere to the principles of transparency, visibility and for spreading information about the scheme.

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CA Abhishek Soni
CA Abhishek Soni

Abhishek Soni is a Chartered Accountant by profession & entrepreneur by passion. He is the co-founder & CEO of Tax2win is amongst the top 25 emerging startups of Asia and authorized ERI by the Income Tax Department. In the past, he worked in EY and comes with wide industry experience from telecom, retail to manufacturing to entertainment where he has handled various national and international assignments.