Dearth of Funds in MGNREGA

Context

The Centre’s flagship rural employment scheme (MGNREGA) has run out of funds halfway through the financial year. This means that payments for MGNREGA workers as well as material costs will be delayed unless the States dip into their funds.

About MGNREGA Scheme

• The Mahatma Gandhi National Employment Equity Act, formerly known as the National Rural Employment Guarantee Act, was passed in 2005 to increase employment generation and social security in India.
• The program is a demand-driven wage system, operated under the auspices of the Department of Rural Development.
• Every adult in a rural area with a work card is eligible for employment under this scheme.
• The program aims to provide 100 days of guaranteed employment in the financial year to senior member volunteers to do unskilled manual labor.
• It covers all regions of India except those with a population of 100% urban.
• There is also an offer for an additional 50 days of employment for the unskilled in rural areas to be notified of a drought / natural disaster.
• In terms of Section 3 (4) of the MGNREGA, States may make provision for the provision of additional days in excess of the time guaranteed under the Act to their funds.

Issues with MGNREGA

• Ridiculously Low Wage Rate
• Insufficient Funding
• Delays in Payment wages
• Ineffective Role of local government
• Large Number of Incomplete works
• Fabrication of Job cards