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Is MGNREGA failing?

Published: 18th Jan, 2019

Recently, the Central government has issued a press brief claiming that 92 per cent of MGNREGA payments have been generated on time this financial year.


Present gaps in implementation of MGNREGA-

1) Low wage rate: Currently, MGNREGA wage rates of 17 states are less than the corresponding state minimum wages. Various judgements have upheld that the MGNREGA wage rate cannot be less than the minimum agricultural wage rate of the state. The low wage rates have resulted in lack of interest among workers in working for MGNREGA schemes, making way for contractors and middle men to take control, locally.

2) Insufficient budget allocation: MGNREGA’s success at the ground level is subject to proper and uninterrupted fund flow to the states. Multiple times in the last few years, funds have dried up in states due to lack of “mother sanctions” from the Central government which hampers the work in peak season. Almost every year, more than 80 per cent of funds get exhausted within the first six months. Thus, the government’s claim of “record allocation” does not hold true in real terms.

3) Regular payment delays: The Union Ministry of Rural Development considers wages paid once the FTO (Fund Transfer Order) is signed by the second signatory. However, delays take place even in the processing of signed FTOs, for which the Management Information System (MIS) does not calculate compensation. Despite the order of the Supreme Court and initiatives and GO (Government Order) by the Union Ministry of Finance, no provision has yet been worked out in the MIS for calculation of full wage delays and payment of compensation for the same. Hence, the government’s claims of 92 per cent on-time payments generation are misguided. 

4) Workers penalised for administrative lapses: The ministry withholds wage payments for workers of states that do not meet administrative requirements within the stipulated time period (for instance, submission of the previous financial year’s audited fund statements, utilisation certificates, bank reconciliation certificates etc). There is no logical or legal explanation to this bizarre arrangement. It is beyond any logic as to why workers would be penalised for administrative lapses.

5) The banking puzzle: The rural banks are highly de-capacitated in terms of staff and infrastructure and thus always remain hugely crowded. The workers normally have to visit the banks more than once to withdraw their wages. Due to great rush and poor infrastructure, the bank passbooks are not updated in many cases. Often, the workers do not get their wages during times of need due to the hassle and the cost involved in getting wages from the bank.

6) Faulty MIS data: The increase in corruption and weakening accountability has roots in the excessive dependence of implementation of MGNREGA on technology (real-time MIS being one of them). There is a growing pile of evidence on how real-time MIS has made MGNREGA less transparent for workers, reduced accountability of frontline functionaries and aided in centralisation of the programme. It has also painted a picture that is far from the truth on the ground. One needs to think about delinking the implementation of MGNREGA from real-time MIS. The data can be uploaded in the MIS post-implementation. It can still be a transaction-based MIS.

7) Non-payment of unemployment allowance: There are a huge number of unemployment allowances being shown in the MIS currently. But inaction from the Central government in ensuring payments of the same has shown that the government wants to use the MIS as per its convenience and is not honouring its own database.

8) Genuine job cards being deleted to meet 100% DBT targets: Genuine job cards are being randomly deleted as there is a huge administrative pressure to meet 100 per cent Direct Benefit Transfer (DBT) implementation targets in MGNREGA. In states like Jharkhand, there are multiple examples where the districts had later requested to resume job cards after civil society interventions into the matter. While the government has been boasting about Aadhar-based savings, the reality is that a huge number of genuine job cards and ration cards are getting deleted and genuine people have been deprived of their due entitlements.

9) Too much centralisation weakening local governance: A real-time MIS-based implementation and a centralised payment system has further left the  representatives of the Panchayati Raj Institutions with literally no role in implementation, monitoring and grievance redress of MGNREGA schemes. It has become a burden as they hardly have any power to resolve issues or make payments. The over-centralisation of the scheme has completely depoliticised the implementation of MGNREGA and local accountabilities have been completely diminished.

10) Administration not honouring local priorities: MGNREGA could be a tool to establish decentralised governance. But, with the administration almost dictating its implementation, it is literally a burden now for the people and especially for the local elected representatives. The governments always use the bottom-up people’s planning strategy to gain political mileage but never honour local priorities while implementing the schemes. Further linking MGNREGA to construction of Pradhan Mantri Awas Yojana (PMAY), individual household toilets, anganwadi centres and rural ‘haats’ have been destroying the spirit of the programme and gram sabhas and gram panchayats’ plans are never honoured. This is a blatant violation of the Act as well.


While the government is relying heavily on the MGNREGA MIS to show that "All is well", MIS system itself need reviewing to correct the present gaps in implementation. The MIS data presently is not a true measure of performance in MGNREGA as a MIS-based implementation, without a robust leakage control mechanism, can only give out faulty data and misguiding impression.

Learning Aid

Practice Question:

Briefly discuss the contribution of MGNREGA as a social security scheme. What are the present gaps in its implementation?


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