April 16, 2024


Syllabus– General Studies 1 (Society)/ 3 (Economy)


  • The Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) was a pivotal shock absorber during the first wave of the pandemic. Its functioning hinges on sufficient budget allocation, reliable payment systems, and ease of access to wages.
  • However, the Government of India (GoI) not only reduced the MGNREGA budget this year but also neglected it in subsequent relief measures post the second wave.
  • The MGNREGA, among other social security programmes, can be a powerful safety net for the poor. But delays in payments continue even in such precarious times.

Normal procedure-

  • Under the Act, workers should get wages within 15 days of completion of work failing which they are entitled to compensation for delays.
  • The MGNREGA payment process consists of two stages. 
    • After work is completed, a Funds’ Transfer Order (FTO) with worker details is digitally sent to the GoI by the panchayat/block. This is the state’s responsibility.
    • The GoI then processes the FTOs and transfers wages directly to the workers’ accounts. This is called Stage 2 and is entirely the GoI’s responsibility.
  • The Act’s guidelines say that the first stage must be completed in eight days and the second within seven days after Stage 1.
    • However, as per official data, only 26 per cent of the transactions of the first quarter of this financial year were credited within the stipulated seven-day period by the GoI.

Recent trends/ analysis:

  • Until recently, every MGNREGA Funds’ Transfer Order (FTO) consisted of multiple transactions of workers across caste categories.
  • On March 2, the GoI issued a circular to change the payment system so that payments can be made separately based on the caste of workers (SC, ST and “Others”).
  • To understand the efficacy of this circular, we obtained all wage transactions from April 1, 2021, to May 23, from 26 randomly sampled blocks of Jharkhand.
    • The objective was to assess the difference in Stage 2 of the payment process across caste categories.
  • The GoI took 26 days on average to process the transactions in the second stage. In a previously conducted study of 90 lakh transactions across 10 states, Stage 2 alone was taking more than 50 days. These delays were completely unaccounted for as they were not reflected in the MGNREGA MIS.
    • Based on these findings, in 2018, the Supreme Court gave strong orders reprimanding the GoI for not paying compensation for the delay it was causing.


  • During such an unprecedented crisis, the move of segregating payments by caste categories raises apprehensions. 
  • While affirmative action is important, experimenting with the payment architecture without transparent discussions or a justified rationale appears bizarre.
    • As per the Ministry of Rural Development (MoRD) the purpose was to assess how much the SC/ST communities benefited from MGNREGA.
  • The digital payments system of MGNREGA has been a laboratory of many experiments since 2012. However, no mechanism to solicit feedback from workers to evaluate the robustness of these systems has ever been created.


  • MGNREGA is one of the largest work guarantee programmes in the world.
  • Objective: The primary objective of the scheme is to guarantee 100 days of employment in every financial year to adult members of any rural household willing to do public work-related unskilled manual work.

Salient Features of the scheme

  • Gives legal guarantee of wage employment to the adult members of rural households who are willing to do unskilled manual labour subject to a maximum of 100 days per household
  • Applicable for all villages in the District
  • Every rural household has the right to register under MGNREGA
  • Job cards issued to every household registered under MGNREGA
  • Job cards issued within 15 days from the date of receipt of application for the job card registration
  • The registered job card holders can seek employment by giving a group / individual application
  • A minimum of 10 job seekers shall apply to sanction a new work under MGNREGA
  • Employment provided by sanctioning one of the works under “Shelf of Works” as identified and prioritized by the village community within 15 days from the date of receipt of applications for providing employment under MGNREGA
  • The village community has the right to choose works under 8 permissible categories of works
  • “Shelf of works” will be identified by the village community for 5 yrs which can be taken up in their villages as per the job demand and entitled persondays
  • The works proposed by the village community cannot be altered by anyone unless they are not in conformity with the guidelines of MGNREGA
  • The work shall be provided within 5 kms jurisdiction from the village
  • If the work provided is beyond 5 Kms, the job seekers shall be given 10% of the minimum wages as additional amount
  • State Govt. to pay 25% of minimum wage for the 1st 30 days as compensatory daily unemployment allowance on failure to provide employment for the families demanding the works under MGNREG Act, and ½ of wage for remaining period of the year
  • Wages are paid according to State Minimum Wage rate notified under Minimum Wages Act 1948. The current wage rate is Rs.117/- for all unskilled work and Rs. 120/- for skilled labour.
  • Equal payment for men and women
  • Wages to be paid within a fortnight
  • 1/3 beneficiaries should be women
  • Work site facilities such as creche, drinking water and shade have to be provided
  • 60:40 wage and material ratio has to be maintained for all works undertaken under NREGA
  • No contractors and machinery allowed
  • Grievance redressal mechanism to be set up for ensuring a responsive implementation process
  • Social Audit is a must for all the works implemented under NREGA. The details of Social Audit conducted during 2010-11 and 2011-12 (up to the month of May)
  • Provisions of RTI Act shall be applicable in Letter & Spirit to ensure transparency and accountability

The office of the Ombudsman is vested with the following powers in order to redress grievances under MGNREGA:

  • Receive complaints from NREGA workers and facilitate their disposal in accordance with law
  • Require the NREGA Authority complained against to provide any information or Issue direction for conducting spot investigation
  • Lodge FIRs against the erring parties
  • Initiate proceedings suo motu in the event of any circumstance arising jurisdiction that may cause any grievance
  • Engage experts for facilitating the disposal of the complaint
  • Direct redressal, disciplinary and punitive actions
  • Report his findings to the Chief Secretary of the State and the Secretary, State
  • Nodal Department for appropriate legal action against erring persons


Question- MGNREGA has proved to be a shock absorber for rural population during pandemic.

In view of the above statement, discuss basic feature of the scheme.

Article- https://indianexpress.com/article/opinion/columns/mgnrega-was-safety-net-for-workers-during-first-wave-but-there-are-holes-in-it-now-7419431/

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