MGNREGA demands makeover

Labourers build check dams under MGNREGA. (Source: IWP Flickr Photos)
Labourers build check dams under MGNREGA. (Source: IWP Flickr Photos)

The article, The MGNREGA crisis: Insights from Jharkhand, published in the Economic and Political Weekly dated May 28, 2016, provides an overview of the status of the Mahatma Gandhi National Rural Employment Guarantee Act or MGNREGA in India. The article says, the Act, launched on February 2, 2006 to provide livelihood security to rural households whose adult members volunteer to do unskilled manual work, is in shambles now. Taking Jharkhand as an example, it goes on to examine the nature and the extent of the crisis.

This analysis draws information from the MGNREGA website, the available literature on the programme in Jharkhand, experience of work already done on MGNREGA in Jharkhand, local activists, civil society organisations and the state government.

But first, the article looks at the problems MGNREGA encountered at the all India level.

  • Gradual decline in employment over the last five years: In 2014-15, 155 crore person-days of MGNREGA work were generated across the country, which is only half of that in 2009-10. In the last two years, the employment rates in Andhra Pradesh and Chattisgarh have gone down by less than half from the previous years, and by 60 percent in Bihar. The number of work days has also declined in states like Uttar Pradesh and Maharashtra, with just five days of work in certain years.


  • Lack of adequate budget leading to work uncertainties and delayed payment: The central government in 2014-15 treated the initial allocation of Rs 34,000 crore as a cap on MGNREGA expenditure. Workers were thus denied work without any unemployment allowance as funds dried up towards the end of the financial year. Delays in transfer of funds from the Ministry of Rural Development also hampered the timely allotment of work in the states. Although the caps were removed later, delays and uncertainties continue. Seventy percent of MGNREGA wages were paid with delays of more than 15 days, while 64 percent were paid a month later in 2014-15.The proportion of delayed payments was more than 90 percent in the states of Punjab and West Bengal.


  • Gross neglect of workers rights and entitlements: It has been found that MGNREGA is no longer linked to Minimum Wages Act and wages are now decided by the central government, sometimes making them even lower than the state’s minimum agricultural wage. There has been a reduction in the compensation paid for delays in wage payment. According to the Payment of Wages Act, the compensation, which was Rs 3000 earlier, is now 0.05 percent of the pending wages per day of delay. The requirement in the Act, which mandates spending three percent of the funds for the benefit of persons with disabilities, has been done away with. Most workers who are denied work are unable to secure the unemployment allowance. Many a times worksite facilities do not exist and grievance redressal mechanisms are rarely implemented.

Jharkhand, as an example

The crisis in the employment guarantee programme has also affected Jharkhand, which has a need and potential for MGNREGA works. Here’s how MGNREGA in Jharkhand performed:

  • Fall in employment: There has been a 20 percent fall in MGNREGA employment in Jharkhand between 2012-13 and 2014-15. Unavailability of work and delays in wage payments have caused immense economic hardships to the workers and they have been forced to migrate to other parts of the country.
  • Disruptions in funding: Budget caps and delays in receiving funds from the ministry in 2015-16 have led to lack of employment opportunities and affected timely payment of wages. Due to this uncertainty, local officials are reluctant to start works, violating workers’ rights rather than dealing with the problems faced due to delay in wage payments. On top of this, the ministry exempted the states from paying compensation to workers who did not receive their wages on time due to shortage of funds.
  • Poor accountability: Even when work is available, workers do not get work due to delays in sanctioning and/or starting schemes or in allotting work. Delay in payments due to lack of appropriate systems in place and poor accountability from officials, who are either unaware of these timelines or ignore them, have affected the functioning of the scheme.
  • Shortage of staff: The staff for MGNREGA includes gram rozgar sevaks, block programme officers, computer assistants, engineers and accountants. However, 25 percent of the posts were found to be vacant in 2015. The staff shortage has been found to increase the load on the existing staff, who are already demotivated to work due to lack of adequate salaries, incentives and appreciation for their work, further increasing the delay in programme implementation.
  • Corruption: Despite the introduction of many transparency and accountability provisions, corruption continues to affect MGNREGA. Surveys have found a gap between self-reported number of MGNREGA works by households as compared to those reported officially. Official records have been found to be twice as high thus indicating siphoning off of funds for payments through false entries in records.
  • Changes in system of wage payments: The system of MGNREGA wage payments was shifted from cash to post offices and banks in 2007. However, workers face problems in accessing post offices and banks.
  • Poor grievance-redressal mechanisms: Most workers are unaware of their right to complain. Those who do manage to take their grievance to a government official or functionary are often turned away.
  • Shift to technology without adequate preparation: Use of technology such as Management Information System (MIS), though considered to increase accountability and transparency, has not helped in Jharkhand due to lack of preparation. For example, introduction of electronic payment systems has been a total failure due to poor preparation and training of staff, mismanagement of resources, lack of adequate equipment and poor infrastructure, such as electricity and internet connections.
  • Linkage with Aadhaar: The MGNREGA work is being linked with Aadhaar to eliminate ghost workers and help in biometric payments to ensure that wages fall into the right hands. However, this too has resulted in problems with work allotment and payment.

A number of efforts, however, have been made in Jharkhand to improve the situation. For example:

  • A survey in Manika block of Latehar and Manatu block of Palamu in Jharkhand had found that implementation of the Act was mainly restricted to the distribution of job cards; workers as well as government officials had a poor understanding of the Act. This led to the establishment of the MGNREGA Sahayata Kendra, operated by local volunteers who help workers understand their entitlements and also with the process of applying for jobs, maintaining accounts, etc.
  • Initiatives such as Kaam Mango Abhiyan were carried out in early 2014 to help workers with large-scale demand for work. Started jointly by the Jharkhand government and the state’s civil society, this initiative, though commendable, did not produce the expected results. A large proportion of workers who applied for work did not get any work or unemployment allowance.
  • Conducting of social audits in 50 gram panchayats of the state involving local activists working on MGNREGA. The audits brought a number of irregularities with the implementation of the Act to the forefront. Action was taken only in few cases and the initiative was not replicated in other gram panchayats.
  • The most recent effort has been the Yojana Banao Abhiyan, a state-wide campaign, conducted in January-February 2016 that includes planning of MGNREGA works for 2016-17 that mobilised hundreds of workers to plan works for their own villages. Over 10 lakh MGNREGA schemes have been planned across Jharkhand.
  • Establishment of “cluster facilitation teams” that included experts who played an important role in planning, estimating, laying out and measuring of MGNREGA works in 76 blocks of the state for about three years (July 2014 to March 2017).The scale of work has almost doubled due to this initiative and the participation of women increased considerably.

The article ends by saying that a decade after the implementation of MGNREGA, the programme is in need of serious attention, the responsibility for which extends from the political leadership to the local officials and functionaries. Evidence shows that Jharkhand needs to make significant improvements in the implementation of the Act with respect to workers entitlements, payment mechanisms, work allotment as well as monitoring mechanisms. The number of positive initiatives undertaken in Jharkhand provide important learnings and open up new possibilities for improving the programme and can set an example for others to follow.

As we write this, the government has announced its plans to converge MGNREGA works with PM Krishi Sinchaee Yojana and Integrated Watershed Management Programme (IWMP) towards water conservation to improve its performance, enhance productivity and income levels.

Please download a copy of the paper from below: