MGNREGA: Features, Objectives, MGNREGA Scheme UPSC Notes

By BYJU'S Exam Prep

Updated on: November 14th, 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 Mahatma Gandhi NREGA or MANREGA/MNREGA.

MGNREGA, short for the Mahatma Gandhi National Rural Employment Guarantee Act, is a pivotal social welfare program in India. Understanding MGNREGA is crucial for the UPSC exam as it falls under the topic Governance in the UPSC syllabus. This act guarantees 100 days of wage employment to rural households, promotes sustainable rural development, and empowers marginalized sections. Check the objectives, features, and implementation of MGNREGA act in detail below.


MGNREGA full form is Mahatma Gandhi National Rural Employment Guarantee Act. It 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 has played a crucial role in empowering rural communities, enhancing their economic well-being, and promoting inclusive growth. It is considered a significant step towards rural development and has had a positive impact on millions of lives across the country.

Overview of MGNREGA

MGNREGA is a social welfare program in India that provides 100 days of wage employment to rural households. It aims to promote livelihood security, rural development, and sustainable economic growth. Check the overview of MGNREGA in the table below.

Highlights Details
Full Form Mahatma Gandhi National Rural Employment Guarantee Act
Scheme launch date 2nd February 2006
Earlier Known as National Rural Employment Guarantee Act
Public Launch date 23rd August 2005
Key Stakeholders under MGNREGA Wage seekers
Three-tier Panchayati Raj Institutions
Gram Sabha
Programme Officer at the Block level
State Government
District Programme Coordinator
Civil Society
Ministry of Rural Development
Self-Help Groups
Districts covered under the MGNREGA Scheme 708 districts
Mandate of MGNREGA 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 MGNREGA

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 labour directly related to the agriculture business during the lean session.
  • For this, he plans to develop the infrastructure for the labourers 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 NREGA renamed as 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 labour.
  • 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 enroll in this scheme to obtain the work.

Features of the MGNREGA Scheme

MGNREGA Scheme is a comprehensive legislation that aims to empower rural communities by providing employment opportunities and strengthening local governance. It covers a wide range of features designed to ensure livelihood security and promote sustainable rural development. Additionally, recent developments, such as the separate budget heads for SC and ST categories, have sparked discussions about the potential impact on the scheme’s funding and implementation. Check the features of the MGNREGA Scheme in detail below.

  • Decentralized Planning: The scheme strengthens Panchayati Raj institutions, particularly Gram Panchayats, which have significant control over managing public works and decision-making processes.
  • Application Procedure: Rural households register with the Gram Panchayat and obtain a job card that contains details of enrolled adult members. Individuals can apply for work by submitting written applications to the Panchayat or the Programme Officer.
  • Time-bound Work Allowance: The scheme ensures that eligible individuals who apply for work must be provided employment within 15 days. If work is not provided, an “unemployment allowance” is granted.
  • Funding Aspects: The funding for the scheme is shared between the central government and the states. It covers various expenses such as wages for unskilled, semi-skilled, and skilled labour, material costs, and administrative costs.

Importance of Mahatma Gandhi National Rural Employment Guarantee Act

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 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 plays a crucial role in poverty reduction by providing guaranteed employment to rural households. It ensures that individuals have access to at least 100 days of wage employment in a financial year, which contributes to their economic well-being and livelihood security.
  • The scheme focuses on the creation of durable rural infrastructure assets, such as water conservation structures, rural connectivity, and land development. By undertaking such works, MGNREGA contributes to the overall development and improvement of rural areas, enhancing their quality of life.

Work Allocation under MGNREGA

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 Anganwadi, 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.

Implementation of the MGNREGA Scheme

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

Gram Panchayats play a crucial role in the implementation and monitoring of the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA). Here are the key roles they fulfill:

  • Registration and Issuance of Job Cards: Gram Panchayats are responsible for registering eligible households and issuing MGNREGA job cards. These job cards serve as proof of entitlement and are required for availing employment under the scheme.
  • Work Planning and Execution: Gram Panchayats identify and propose suitable work projects in consultation with the local community. They prioritize projects based on local needs, such as water conservation, road construction, or afforestation. They ensure the timely execution of these projects in accordance with MGNREGA guidelines.
  • Allocation of Work and Ensuring Transparency: Gram Panchayats allocate work to registered households based on demand and availability. They maintain transparency by displaying the list of beneficiaries, work details, and payment information at prominent locations. This helps prevent favouritism and ensures fair distribution of employment opportunities.
  • Wage Payment and Record Keeping: Gram Panchayats are responsible for disbursing wages to MGNREGA workers in a timely manner. They maintain accurate records of attendance, work completed, and wage payments made. This helps in monitoring and tracking the implementation of the scheme at the grassroots level.
  • Social Audits: Gram Panchayats facilitate social audits, which involve the active participation of the local community in verifying the records and processes of MGNREGA implementation. They organize public hearings, where beneficiaries can voice grievances and concerns, ensuring transparency and accountability.
  • Grievance Redressal: Gram Panchayats serve as the first point of contact for addressing grievances related to MGNREGA. They play a crucial role in resolving issues faced by workers or addressing complaints related to irregularities, delays, or payment discrepancies.
  • Overall Monitoring and Reporting: Gram Panchayats monitor the progress of MGNREGA activities in their respective areas. They collect data, prepare reports, and submit them to higher authorities for monitoring and evaluation purposes. This helps in assessing the impact and effectiveness of the scheme.

Challenges in 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 labourers in 15 days and were not even compensated for the delayed payment. As a result, the labourers started to lose interest in working and the MGNREGA scheme.
  • Due to a lack of attention and inspection, much work remains incomplete that has been allocated under the MGNREGA scheme.

Impact of MGNREGA Scheme 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. Check the impact of MGNREGA Scheme on the Indian Economy in detail below.

  • Financial Drain and Irregularities: MGNREGA has put a strain on India’s financial resources, and the actual benefits of the scheme often do not reach the intended beneficiaries. Irregularities in the fund’s transfer process lead to the shrinkage of funds before reaching the beneficiaries, hindering the full potential of the scheme.
  • Empowerment and Fund Allocation: Article 243(G) grants MLAs the authority to determine the empowerment of Panchayats, creating ambiguity in fund allocation and decision-making processes. This provision sometimes hampers the effective utilization of funds and may limit the empowerment of local governance institutions.
  • Leakage and Corruption: MGNREGA has faced criticism for leakages and corruption in its implementation. However, the introduction of the Direct Beneficiary Transfer (DBT) system, wherein workers receive their payments directly into their bank accounts, has significantly reduced the chances of corruption and improved transparency.


To succeed in the UPSC exam, it is crucial for candidates to have a strong understanding of important topics like MGNREGA. This act is significant for both the prelims and main exams, and candidates should focus on learning its features, objectives, implementation, and the MGNREGA Scheme.

MGNREGA is a crucial topic to learn as it is one of the most important government schemes launched by the government. Solving previous year papers can also help candidates develop the skill of answering questions within the given time frame. For a complete understanding of the topic, it is recommended that candidates refer to the NCERT books for UPSC and grasp the fundamental concepts


MGNREGA, or the Mahatma Gandhi National Rural Employment Guarantee Act, is a landmark legislation in India that aims to provide employment and social security to rural households. During the probation training of IAS Officers, they receive primary instruction on the MGNREGA Scheme. Candidates should practice MCQs and practice answer writing to evaluate their level of understanding. Below we have provided some sample questions for practice purposes.

Question: What is the primary objective of the Environment Protection Act of 1986? (A) Promoting urban development, (B) Enhancing industrial growth, (C) Providing 100 days of wage employment in rural areas, (D) Encouraging international trade

Answer: (C) Providing 100 days of wage employment in rural areas

Question: Which section of the MGNREGA deals with the provision of unemployment allowance in case of non-provision of employment within the stipulated time? (A) Section 7, (B) Section 15, (C) Section 23, (D) Section 32

Answer: (C) Section 23

For UPSC Mains

Question: MGNREGS has been a critical step in creating jobs and reducing rural poverty. Indicate the successes and shortcomings of the MGNREGA Scheme in India in this aspect.

Question: Analyze the MGNREGA scheme’s effectiveness at resolving the rural hardship issue.

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