Why MGNREGA will serve for a long time!

Why MGNREGA will serve for a long time!

National Rural Employment Guarantee Act 2005 or NREGA, later rechristened as the “Mahatma Gandhi National Rural Employment Guarantee Act” (or, MGNREGA), is Indian labor law and social security measure that guarantees the ‘right to work’. It aims to ensure security in rural areas by providing at least 100 days of active wage employment in a financial year to every household whose adult members volunteer to do unskilled manual work, according to a trusted source. Here is some food for thought for change in MGNREGA that can help-


1. Age- 

The “adult” age in the rural household can be brought down to 15 years, instead of 18 years. In rural areas, persons under 15 years of age, will have to spend at least 1500 hours/ year in a nearby school to qualify the age limit.

2. Block- 

“Block” can be redefined as a single entity of a gram panchayat, instead of a conglomerate of gram panchayats. Each panchayat will have a representative from individual homes.

3. Wage- 

Minimum “wage” can be increased to at least INR 200/ day or INR 50/hour at some stage. Please note that only a minimum wage is guaranteed to unskilled individuals when they are not working.

4. TimeLine-

The “timeline” can be changed to at least 120 days or a quarter of active employment days, instead of 100 days. But, at least 50 days can be a guarantee of payments/ work. 50 days of minimum payment comes to 2500 INR/ month, which can be a guarantee.

5. Social Audits- 

“Audits” that will serve long for the actual effective implementation of MGNREGA via a labor card attached to the working individual. The labor card will be similar or an adjunct to the Aadhar Card or unison with the same. It will contain the details of remuneration received, minimum wage fixed, age, domicile details, grievance details, days worked in a linked separate database connected to the labor card. All this is fed into the information systems for audit and planning purposes.

6. Link to the Aadhar Card- 

The labor card can be linked to the Aadhar card bank details along with mobile details for financial inclusion as an entire gamut. The wages get disbursed immediately to the individuals, within the 20-20-60 ratio, which means 20% pre-paid, 20% at the end of the work, and 60% within 20 days of completing work.

7. Uniform Labor Code- 

The minimum wages must be same across geographies, instead of variations in minimum wages across ranges to address skew in geographies.

8. Labor Statistics- 

The labor card is also a supplement to the individuals working in the fields of paddy. This labor card also provides all the necessary details of the individuals, not just in MGNREGA.

9. Post Office, Bank and Insurance- 

The labor card is activated with a payment bank- namely post offices, or any other financially inclusive banks so that the wages are dispersed in this accounts. Even payment banks can provide small micro-insurances.

10. Minimum grace period- 

The maximum period for the grace for disbursing of wages can be 20 days. Any payment beyond that can accrue 1.5% additional cost to wage, per month!

11. Link Work to Wages- 

The amount of work-load borne can be calculated while providing wages. A information system would record this.

12. Transparent system- 

To reduce the wage distribution, certain blocks of gram panchayats will have to be recognized to launch MGNREGA with full weights. This would be based on certain economic indicators.

13. Disbursing of wages- 

The direct cash settlement happens for the first 20% of the wage; the rest through the payment banks only. The biggest factor of payment bank or financial inclusion is the use of debit/ credit facility in the payment bank.

14. Work Chunk- 

The work would be in finite chunks using estimation of work for MGNREGA, not based in time-lines. This would require calculation of man-days at work.

15. Withdrawing money- 

The head of the family is a joint account holder of the payment bank along with the individual working under MGNREGA. This would involve a withdrawal transparency.

The other dimensions of MGNREGA are economic security, self-targeting, women’s empowerment, asset creation, corruption, how the scheme impacts agricultural wages.

References: 1. Wikipedia 2015, Search Words- NREGA (https://en.wikipedia.org/wiki/National_Rural_Employment_Guarantee_Act_2005)

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