MGNREGA: Mahatma Gandhi National Rural Employment Guarantee Act | MGNREGA UPSC

By Balaji

Updated on: February 17th, 2023

MGNREGA stands for Mahatma Gandhi National Rural Employment Guarantee Act, established to employ the rural population to maintain their livelihood. MGNREGA Scheme was enacted to provide an employment guarantee of 100 days of work to rural unskilled labour within fifteen days of registration. If employment is not given, the unemployment allowance must be paid. MGNREGA Scheme, in the local dialect, is also known as Mahatama Gandhi NREGA or MANREGA/MNREGA.

Previously, the Mahatma Gandhi NREGA old Version scheme was called the National Rural Employment Guarantee Act, but later, it was renamed Mahatma Gandhi National Rural Employment Guarantee Act. The topic of MGNREGA UPSC is significant for both UPSC Prelims and UPSC Mains.

Table of content

  • 1. MGNREGA (more)
  • 2. History of MNREGA (more)
  • 3. Objectives of MGNREGA (more)
  • 4. Features of the MGNREGA Scheme (more)
  • 5. Mahatma Gandhi National Rural Employment Guarantee Act – Details (more)
  • 6. MGNREGA: Work Allocation (more)
  • 7. MGNREGA Scheme: Implementation (more)
  • 8. Role of Gram Panchayats in MGNREGA (more)
  • 9. Challenges of MGNREGA (more)
  • 10. MNREGA Scheme: Impact on the Indian Economy (more)
  • 11. MGNREGA UPSC (more)
  • 12. MGNREGA UPSC Question (more)


MGNREGA is the short form of Mahatma Gandhi’s National Rural Employment Guarantee Act. The Mahatma Gandhi NREGA was launched on the 2nd of February 2006. Formerly, this act was called NREGA. MGNREGA Scheme covers 708 districts and employs the non-skilled rural population with the MGNREGA job card, a legal document that allows a worker (18+ years of age) to become entitled to work for the MGNREGA Scheme.

MGNREGA Highlights Details
Full Form of MGNREGA Mahatma Gandhi National Rural Employment Guarantee Act
MGNREGA scheme launch date  2nd February 2006
MGNREGA earlier called National Rural Employment Guarantee Act
MGNREGA Act launched for public on 23rd August 2005
Key Stakeholders under MGNREGA Wage seekers, Three-tier Panchayati Raj Institutions (PRIs), Gram Sabha (GS), Programme Officer at the Block level, State Government, District Programme Coordinator (DPC), Civil Society, Ministry of Rural Development (MoRD), Other stakeholders (In line departments, convergence departments, Self-Help Groups (SHGs)
Districts covered under the MGNREGA Scheme 708 districts
The mandate of Mahatma Gandhi NREGS Provision of at least 100 days of work that provides a guaranteed wage in a financial year.
MGNREGA Job Card document renders a worker entitled to work under the MGNREGA scheme.

History of MNREGA

Mahatma Gandhi National Rural Employment Guarantee Act was launched in August 2005. However, the MGNREGA Scheme was launched in February 2006. Initially, it was named the National Rural Employment Guarantee Act or NREGA. Here is a brief history of MGNREGA:

  • The history of MGNREGA dates back to 1991 when PV Narasimha Rao proposed a scheme for generating employment for the rural population with a certain set of goals.
  • PV Narasimha Rao aimed to generate employment for labor directly related to the agriculture business during the lean session.
  • For this, he plans to develop the infrastructure for the laborers and provide them with enhanced management and food security.
  • This scheme was known as NREGA till 2005, but in 2009, after an amendment to the National Rural Employment Guarantee Act 2005, its nomenclature was changed, and it became MGNREGA.

Objectives of MGNREGA

MGNREGA aims to provide employment to rural people for a better living. It aims to address the causes of chronic poverty through the works undertaken and ensure sustainable development. The MGNREGA Act was introduced to improve the purchasing power of rural people, primarily semi or unskilled workers, to people living below the poverty line in rural India.

The following are the objectives of MGNREGA:

  • The first and most important objective of MGNREGA is to provide a guaranteed 100 days of employment to the rural population, especially unskilled labor.
  • This is because MGNREGA aims to provide a better source of living to the economically backward section of society.
  • MGNREGA took the initiative to reduce the number of migrants moving from rural to urban areas and provide job opportunities for them at their residences.
  • Along with helping the economically weaker sections of society, it also helps to strengthen the Panchayati Raj system of India.

The Govt of India backs this social security scheme. It provides employment and livelihood to rural labourers in India. The person seeking work under the MGNREGA must be registered under the gram panchayats. Therefore, a person must enrol in this scheme to obtain the work.

Features of the MGNREGA Scheme

The Mahatma Gandhi National Rural Employment Guarantee Act is a powerful act that covers 708 districts. The key features of MGNREGA Scheme are:

  • Decentralized planning: MGNREGA strengthens Panchayati Raj, and nearly all control is in the hands of Gram Panchayats to manage pubic-related works. District panchayats manage pubic-related works. They are even more powerful to accept or reject the recommendations made by district panchayats. Panchayati Raj Institutions are primarily responsible for planning, implementing, and monitoring the allocated and implemented works. Gram Sabhas are empowered to undertake the recommendation of the work and must execute at least 50% of the work.
  • Application Procedure: Adult members of rural households submit their name, age, and address with photos to the Gram Panchayat. The Gram Panchayat registers households after making inquiries and issues a job card. The job card includes the complete details of the adult members enrolled and his /her photo. A registered person can submit an application for work in writing (for at least fourteen days of continuous work) to Panchayat or to Programme Officer.
  • Time-bound work allowance or unemployment allowance: Anyone meeting the criteria to obtain the work, if approached for getting it, must be given the work within 15 days of their application, failing which an ‘unemployment allowance’ must be given.
  • Funding aspects: the fund is shared between the center and the states. There are three major items of expenditure-
    • Wage- unskilled, semi-skilled, and skilled labor,
    • Material cost,
    • Administrative cost

The central govt has to take care of 100% of the unskilled labor, 75% of the cost of materials, 75% of the cost of semi-skilled and skilled laborers, and 6% of the administrative costs

On 03 June 2021, the Government of India decided to provide separate budget heads for SC and ST categories under MGNREGS from 2021-22 for wage payment. However, Workers’ rights advocates said this would complicate the payment system and expressed fears that it may lead to a reduction in scheme funding.

Mahatma Gandhi National Rural Employment Guarantee Act – Details

MGNREGA is responsible for ensuring operational guidelines and compliance and providing transparency in working styles at all levels.

  • The programs initiated under the MGNREGA scheme are mostly based on demand and have legal provisions which can be appealed in court as a case if work is not provided or in case of delayed payment.
  • There is always a constant check on the working progress of the scheme. For this, the central and state governments are directly responsible for auditing the work undertaken.
  • There are two bodies named EGC and SEGC, which stand for Central Employment Guarantee Council and State Employment Guarantee Council, respectively, which prepare the annual reports to be audited by central and state governments.
  • Under the MGNREGA working ambience, all work sites facilities such as creches, drinking water, and first aid are provided.

MGNREGA: Work Allocation

India is administratively divided into States and Union Territories. Each state has districts, then within districts, there are blocks, and within blocks have wards. This scheme gives employment related to public work at the block level. The central govt releases the funds to the states. States then give the funds to local bodies, i.e., gram panchayats. All the labourer’s accounts are registered with the gram panchayats.

MGNREGA work allocation is directly linked to agriculture and allied activities. Majorly works are allocated concerning Publics works relating to Natural resource management, community or individual assets, and common infrastructure works. Variety of permissible works which the Gram Panchayaths can take up:

  • Raising a block plantation in community lands, i.e., planting of trees.
  • Maintenance and building of check dams. Check dams are the small dams created in small reservoirs to check the flow of water.
  • Building farm ponds
  • Water absorption trenches at foothills to reduce soil erosions
  • Digging of soak pits
  • Restoration of irrigation ponds
  • Construction of anganwadis, roads, etc.

All these kinds of public works are given under the scheme. MGNREGA provides “Green” and “Decent” work. MGNREGA focuses on the economic and social empowerment of women. The Gram Sabha is the principal forum for wage seekers to raise their voices and make demands. The Gram Sabha and the Gram Panchayat approve the shelf of works under MGNREGA and fix their priority.

MGNREGA Scheme: Implementation

Gram sabhas conduct social audits to enable the community to monitor the scheme’s implementation. it is a way of measuring, understanding, reporting, and improving an organization’s social and ethical performance. Also, it helps to narrow the gap between vision, goal, and reality. Other measures include

  • National electronic Fund Management System (NeFMS): At the Panchayat level, officials have been trained to use the electronic system developed by the National Informatics Centre (NIC). NeFMS is meant to reduce the delay in funds for workers to meet their daily needs. Aadhar card is linked so the chances of corruption are less. Under the NeFM system, the workers will receive the payment within 48 hours from when gram panchayats generate an order.
  • Grievance redressal mechanism: State-level officers have been designated to monitor the disposal of complaints in the state. Also, complaint boxes at district levels have been installed.
  • State quality monitor: It includes govt officials at the district level supervising the utilization of funds under the scheme.
  • National level monitors: it consists of retired as well as serving civil servants to monitor the policy and implementation of the program at the national level.

Role of Gram Panchayats in MGNREGA

Various institutions like Gram Panchayats, Gram Sabhas, and State Governments have played crucial roles in making the MGNREGA scheme successful. Let’s have a look at the roles performed by them-

Gram Panchayat Gram Sabha State Government
It is entitled to receive job applications and verify them. The main role of Gram Sabha is to note down the priority of work in specific localities. It prepares the rules and responsibilities for the state concerning this scheme.
It keeps a record of all the households in the village. It is authorized to check the work performed within the gram panchayat. It installs the unit of the state employee guarantee Council and state employee guarantee fund.
It is responsible for distributing the MGNREGA job cards to the applicants. It is the primary junction to perform social audits. It ensures that the gram Rojgar Sahayak PO and staff at the state, district, and village levels two properly execute the MGNREGA scheme.
It distributes the work to the applicants within 15 days of application. Besides all these things, Gram Sabha is a big help desk for all queries related to the MGNREGA scheme.
It is authorized to prepare reports from time to time to cover the achievement of the scheme.

Challenges of MGNREGA

Although MGNREGA is a great scheme that works for the benefit of the rural population, there are some challenges to it:

  • Although the highest budget allocation is made for the MGNREGA scheme, the state government could not meet the constant demand for employment because of the decreasing GDP and lack of funds.
  • Another major challenge to this scheme is that governments failed to distribute the payments to the laborers in 15 days and were not even compensated for the delayed payment. As a result, the laborers started to lose interest in working and the MGNREGA scheme.
  • Due to lack of attention and inspection, much work remains incomplete that has been allocated under the MGNREGA scheme.

MNREGA Scheme: Impact on the Indian Economy

With the implementation of MGNREGA, reports suggest that there have been significant changes in the social fabric, such as a reduction in distress migration, higher participation by SCs and STs population, an improvement in their purchasing power, an increase in average wages, equal wages for men and women economic empowerment of poor women, improvement in a rural environment and sanitation, etc.

Over the years, MGNREGA has also caused a major financial drain on India’s economic resources. The actual benefits of this scheme do not reach rural laborers. In the process of funds transfer, there are a lot of irregularities that cause funds to shrink before it reaches their beneficiaries. Article 243 (G) empowers an MLA to decide whether or not Panchayats need to be empowered. This provision sometimes makes it difficult for fund allocation.

NREGA has also been criticized for leakages and corruption implementation. But with the introduction of the Direct Beneficiary Transfer (DBT) system introduced by the central government, wherein the workers get their payment directly into the bank account, the chances of corruption have decreased significantly.


MGNREGA is a crucial topic to learn from the perspective of the IAS exam. It comes under the current affairs and economics section of the UPSC Syllabus. Many questions have been asked from MGNREGA in the UPSC exams.

To ensure that you complete the topic in a detailed manner, download the NCERT books for UPSC and refer to the Economics Book for UPSC.


Download the UPSC Previous Year Question Papers to revise the practice topic.

The following question was asked in the UPSC Prelims examination:

Q1. MGNREGA provides jobs to the people who-

  1. Are a job card holders
  2. Are the graduates and postgraduates
  3. Are the farmers
  4. Are farmers

Choose the correct option below-

A) 1 only

B) 2 only

C) 1 and 3

D) 3 and 4.

Correct Answer: Option A

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