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Centre’s Flagship MGNREGA running out of funds



Implemented in 2005, the flagship scheme of the Central Government MGNREGA ran out of funds in the middle of the financial year. As per the latest financial statement, under the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) scheme, most states have exceeded the funds beyond their allocated shares. Therefore, the net balance runs into a negative of Rs 8686 crores.

During the outbreak of the Covid 19 pandemic, many of the labourers lost their jobs and were forced to migrate to their home districts and villages from large cities, which led to the increase in the demand for a job under this scheme.  As a result, last year, this scheme was allocated a fund of Rs. 1.11 lakh crores, the highest ever till the inception to accommodate the rising demand during the nationwide lockdown.


It was introduced as a social measure that guarantees “the right to work” at the grass-root level.

The key tenet of this labour law and social measure is that it casts a legal obligation upon the state government to provide at least 100 days of wage employment in a financial year in rural areas to enhance their quality of life.

Main objectives of this scheme

  1. Generation of paid rural employment of at least 100 days for each worker who volunteers for unskilled labour.
  2. Proactively ensuring social inclusion by strengthening the livelihood base of rural poor.
  3. Creation of durable assets in the rural areas such as walls, canals, roads, ponds. Etc.
  4. To reduce the migration from rural areas to urban areas.
  5. To create rural infrastructure by using untapped rural labour.

Roles of Gram Sabha

  1. It determines the order of priority in which the works shall be carried out through the meetings of the Gram Sabha while keeping into consideration its needs, the potential of the local area and local resources.
  2. Monitor the execution of works within the Gram Panchayat.

Roles of Gram Panchayat

  1. To receive applications for registration
  2. To verify the registration applications
  3. To register the households
  4. To issue Job Cards (JCs)
  5. To receive applications for work
  6. To issue dated receipts for the applications of these work
  7. To allocate work to such eligible persons within 15 days of submitting the application or from the date when work is sought in the case of an advance application.
  8. It also identifies and plans work, developing a shelf of projects including determination of the order of their priority.

Responsibilities of State Government under MGNREGA

  1. To frame Rules on matters pertaining to State responsibilities under Section 32 of Act
  2. To develop and notify the Rural Employment Guarantee Scheme for the State.
  3. To set up a State Employment Guarantee Council (SEGC).
  4. To set up a State level MGNREGA implementation agency/ mission with an adequate number of professionals.
  5. To set up a State level MGNREGA social audit agency/directorate with an adequate number of people well versed with the MGNREGA processes and demonstrated commitment to social audit.
  6. To establish and operate a State Employment Guarantee Fund (SEGF).

Eligibility Criteria

  1. Must be a Citizen of India in order to seek NREGA benefits.
  2. Job seeker must have completed 18 years of age at the time of the making of such application.
  3. The applicant must be part of a local household
  4. Applicant must volunteer for unskilled labour.

Under the Central Government, the Ministry of Rural Development is the monitoring agency for the entire implementation of the scheme.

  1. Within 15 days of submitting the application, wage employment will be provided to the applicant.
  2. Right to get unemployment allowance
  3. Social Audit of MGNREGA works is mandatory.
  4. The Gram Sabha is the principal forum for wage seekers to raise their voices and make demands.
  5. Gram Sabha and the Gram Panchayat approves the shelf of works under MGNREGA and fix their priority.
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