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Economic Bytes: Centre to pump 40,000 crore more into NREGA for FY21

Centre to pump 40,000 crore more into NREGA for FY21

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Centre to pump 40,000 crore more into NREGA for FY21
Centre to pump 40,000 crore more into NREGA for FY21

In News:

  • The union government announced a sharp 65 per cent hike over the Budget outlay for the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) in the fifth and final tranche of AtmaNirbhar Bharat package.

News Summary: Centre to pump 40,000 crore more into NREGA for FY21

  • As part of the Atmnirbhar Bharat Abhiyan Package, the Centre announced 65 per cent hike for an additional Rs 40,000 crore for MGNREGS for FY21.
  • The Union Finance Minister said the additional funds will help generate nearly 300 crore person days during the current financial year.
  • The sharp hike is indicative of the likely surge in demand for work in rural areas, as migrant workers return to their homes amid the coronavirus lockdown.

About: Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA)

  • The Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) was enacted in 2005 providing a legal right to employment for adult members of rural households.
  • It aims at addressing causes of chronic poverty through the ‘works’ (projects) that are undertaken, and thus ensuring sustainable development.

Core objectives:

  1. Providing not less than 100 days of guaranteed wage employment in a financial year to every rural household whose adult members volunteer to do unskilled manual work in rural areas as per demand.
  2. Strengthening the livelihood resource base of the poor.
  3. Proactively ensuring social inclusion.
  4. Strengthening Panchayati Raj Institutions.


  • Wages: Wages must be paid according to the wages specified for agricultural labourers in the state under the Minimum Wages Act, 1948, unless the central government notifies a wage rate.
  • Time bound guarantee of work and unemployment allowance: Employment must be provided with 15 days of being demanded failing which an ‘unemployment allowance’ must be given.
  • Decentralized planning: Gram sabhas must recommend the works that are to be undertaken and at least 50% of the works must be executed by them. PRIs are primarily responsible for planning, implementation and monitoring of the works that are undertaken.
  • Transparency and accountability: There are provisions for proactive disclosure through wall writings, citizen information boards, Management Information Systems and social audits. Social audits are conducted by gram sabhas to enable the community to monitor the implementation of the scheme.
  • Funding: Funding is shared between the centre and the states. There are three major items of expenditure – wages (for unskilled, semi-skilled and skilled labour), material and administrative costs. The central government bears 100% of the cost of unskilled labour, 75% of the cost of semi-skilled and skilled labour, 75% of the cost of materials and 6% of the administrative costs.

Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS):

  • MGNREGS was created as directed in MGNREGA as the means to implement the Act so that the guarantee comes into effect.
  • The State Governments have to incorporate all features of MGNREGA in the State MGNREGS.
  • The State Governments have powers to make rules and amend the concerned State scheme, but only the central government can amend the foundational Act.
  • In 2019, an MoU was signed between the Ministry of Rural Development (MoRD) and National Remote Sensing Centre (NRSC) under ISRO for geo-tagging of the assets created under MGNREGS in each Gram Panchayat.
  • As of July 2019, 3.61 crore assets has been geo-tagged under MGNREGS.

Financial Year 2019-20 stats:

  • As per the data available on MGNREGA portal, during 2019-20:
    1. 5.48 crore households worked under the rural job guarantee scheme, which is the highest since 2010-11.
    2. 7.89 crore individuals worked under the scheme, which is the highest since 2012-13.
    3. A record number of 9.33 crore persons demanded work under MGNREGA, against that 9.30 crore individuals were offered jobs and 7.89 crore individuals worked.
    4. 265.36 crore person day were generated against a target of 276.76 crore.

Also Read: COVID19 Package: Fifth set of measures under the Atmanirbhar Bharat Abhiyan

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