National Rural Employment Guarantee Act 2005 (or, NREGA No 42, later renamed as the “Mahatma Gandhi National Rural Employment Guarantee Act”, MGNREGA), is an Indian labour law and social security measure that aims to guarantee the ‘right to work’. It aims to do better the livelihood security in rural areas by providing at least 100 days of wage employment in a current financial year to every household whose adult members volunteer to do unskilled manual work.
The act was first proposed in 1991 by P.V. Narasimha Rao. In 2006, it was finally accepted in the parliament and started its implementation in 625 districts of India. Based on this pilot experience, NREGA was scoped up to cover all the districts of India from 1 April 2008. The statute is hailed by the government as “the largest and most ambitious social security and public works programme in the world”. In its World Development Report 2014, the World Bank termed it a “stellar example of rural development.
- According to the Eleventh Five Year Plan (2007–12), the number of Indians living on less than $1 a day, called Below Poverty Line (BPL), was 300 million that barely declined over the last three decades ranging from 1973 to 2004, although their proportion in the total population decreased from 36 percent (1993–94) to 28 percent (2004–05), and the rural working class dependent on agriculture was unemployed for nearly 3 months per year.
- The UPA Government had planned to increase the number of working days from 100 to 150 before the 2014 Lok Sabha Elections in the country but failed.
- For evaluation of outcomes, the law also requires management of data and maintenance of records, like registers related to employment, job cards, assets, muster rolls and complaints, by the implementing agencies at the village, block and state level.
- The law also lists permissible works: water conservation and water harvesting; drought proofing including afforestation; irrigation works; restoration of traditional water bodies; land development; flood control; rural connectivity; and works notified by the government. The Act sets a minimum limit to the wage-material ratio as 60:40. The provision of accredited engineers, worksite facilities and a weekly report on worksites are also mandated by the Act.
- The law stipulates Gram Panchayats to have a single bank account for NREGA works which shall be subjected to public scrutiny. To promote transparency and accountability, the act mandates ‘monthly squaring of accounts’. To ensure public accountability through public vigilance, the NREGA designates ‘social audits’ as key to its implementation.
- The NDA government has decided to provide 150 days for rain-hit areas.
- The registration process involves an application to the Gram Panchayat and issue of job cards. The wage employment must be provided within 15 days of the date of application. The work entitlement of ‘120 days per household per year’ may be shared between different adult members of the same household.
- Furthermore, the Act sets a minimum limit to the wages, to be paid with gender equality, either on a time-rate basis or on a piece-rate basis. The states are required to evolve a set of norms for the measurement of works and schedule of rates. Unemployment allowance must be paid if the work is not provided within the statutory limit of 15 days.
- The most detailed part of the Act (chapter 10 and 11) deals with transparency and accountability that lays out the role of the state, the public vigilance and, above all, the social audits.
- The legislation specifies the role of the state in ensuring transparency and accountability through upholding the right to information and disclosing information proactively, preparation of annual reports by CEGC for Parliament and SEGCs for state legislatures, undertaking mandatory financial audit by each district along with physical audit, taking action on audit reports, developing a Citizen’s Charter, establishing vigilance and monitoring committees, and developing grievance redressal system.