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Deepak Joshi (1011307)

Kruthika M (1011324)

Praful Kularkar (1011341)

Shubhangi Satpute (1011357)

Virendra Meena (1011374)

m
 

Executive Summary .......................................................................................................................................................... 3
Overview.......................................................................................................................................................................... 4
Salient Features............................................................................................................................................................ 4
Social Impact of NREGA ................................................................................................................................................ 5
Roadmap to NREGA ......................................................................................................................................................... 6
Drafting of NREGA ........................................................................................................................................................ 6
NREGS Barriers and Evolution .......................................................................................................................................... 7
Effectiveness and Improvements...................................................................................................................................... 9
Lessons and Takeaways .................................................................................................................................................. 10
Appendix A..................................................................................................................................................................... 10
Appendix B..................................................................................................................................................................... 13

2|P a ge
„   
National Rural Employment Guarantee Act (NREGA), 2005 is a landmark act that has been enacted
after sixty years of independence (Act notified on 2/1/2006). The need for a social security net in India had
been largely unmet since Independence. There was no protection from social injustices such as poverty,
unemployment and inequality for the majority rural population in India. Many Government-launched
developmental programmes met with initial success but lost steam in the long run. The major reason for this
being that social protection or the need to provide social security to needy citizens was considered an act of
philanthropy by the Government. It is here that the NREGS, became a path-breaker as it succeeded in
changing this notion by viewing social protection as a right of citizenship. The concept of ͚guaranteed social
minimum͛ where entitlement extends beyond just cash and food transfers, and that is based on citizenship
and not philanthropy, took root.
The main premise for the legislation was to provide a social security and livelihood security net to rural
poor especially during the non crop lean season so as to forbid them to fall below to levels of the designated
poverty line. This Act provides a guarantee for a minimum of one hundred days of employment for all
households in rural areas across India in manual work, if demanded. The act, and consequently the scheme is
endowed with the multi facets of good governance like participatory approach, transparency, accountability,
right to information, social audits etc which play a pivotal role maneuvering the operational part of the act and
make it a successful public initiative in employment provisioning.
The scheme has brought alterations in the existing power structures at various levels in Government
officials, and empowering rural society due to its ͞self-targeting͟ feature. It is quite natural that a public policy
of such scale is bound to have various externalities at various levels at least during first few years of its
implementation across the country and same is true for NREGA. Infrastructural issues cropped up, like
corruption, siphoning of funds by the BDOs and Sarpanchs, and caste discrimination. Nevertheless, the
scheme continuously evolving according to the dynamic needs of the society can be considered a significant
success given the tangible changes that it has effected at the grassroots level. NREGS has been slowly but
surely, bringing about encouraging improvements in the area of women͛s empowerment and functional
literacy in rural areas. The following exhibit gives a big picture view of the progress of NREGS over the years.

1
http://www.ipc-undp.org/pressroom/files/ipc130.pdf
3|P a ge
 The scheme is overall an excellent case to understand the dynamics involved in conceiving and
implementing a welfare scheme of such a large scale as the NREGS. The linkages that occur at various levels
among different stakeholders and the importance of powerful interest groups to drive social ideas is a major
take-away from this whole exercise.

ë 
National Rural Employment Guarantee Act (NREGA) is the flagship welfare programme of the UPA
Government that directly touches lives of the poor and promotes inclusive growth. The Act aims at enhancing
livelihood security of households in rural areas of the country by providing at least one hundred days of
guaranteed wage employment in a financial year to every household whose adult members volunteer to do
unskilled manual work. Notification of the National Rural Employment Guarantee Act came in September 2005
and was launched on February 2, 2006. It was renamed as Mahatma Gandhi National Rural Employment
Guarantee Act (MNREGA) on October 2, 2009 as a humble tribute to the Father of the Nation. 2
It marked a paradigm shift from the previous wage employment programmes with its m c  c
m  that makes the Government legally accountable for providing employment to those who demand it.
NREGA is the first ever law internationally, that guarantees wage employment at an unprecedented scale.
The primary goal of NREGA is to create a m
c c  c
 for vulnerable groups by providing a
fall-back employment source, when other employment sources are scarce or inadequate. It strives to
strengthen the natural resource base by providing work focused on water conservation, land
development and drought proofing, thus m

 m
by rural poor households in the lean period. It
acts as a model of governance reform anchored on the principles of transparency and accountability by
serving as growth engine for sustainable development of agricultural economy.3
    

The programme was unique in many aspects that helped to achieve the support of various
stakeholders. Some of its salient features NREGA are:

÷c ü  c . It is an employment programme coupled with a rural upliftment scheme to

create social equity, an empowerment scheme and a crucial public investment method to create
durable assets.
÷c m
c c m m: The State is made legally binding to satisfy the right to work and wage
payment within 15 days as per this scheme. State Governments are liable to pay unemployment
allowance to wage seekers if it fails to provide employment within the stipulated time. 4
÷c 
c m
: Resource transfer under NREGA is based on the demand unlike the other
employment programmes and thus provides another critical incentive to states to leverage the act to
meet employment needs of the poor.

2
http://www.gktoday.in/2009/07/national-rural-employment-guarantee-act.html
3
http://www.slideshare.net/ginosmit/nrega-national-rural-employment-guarantee-act-guidelines-eng-presentation
4
http://www.scribd.com/doc/2176739/Two-Years-of-NREGA

4|P a ge
 ÷c 
mc 



c The programmec strengthens decentralization and deepens the processes of
democracy by giving a pivotal role to the Panchayati Raj Institutions in planning, monitoring and
implementation.
÷c ü 
c m
: At least one-third of the beneficiaries shall be women who have registered
under the scheme making them independent and increasing their overall awareness.
÷c mm
m
 c
c


cSocial audits by the Gram Sabhas, mandatory disclosure of muster
rolls, public accessibility of all documents and account, regular updating of job cards infuses
transparency and accountability in governance.
÷c m
cm c
 : The scheme lays emphasis on responsive implementation process.
All accounts and records related to the scheme are available for public scrutiny.5
÷c Õ
 m
c
c 


cm
  cÕm
centralization of data because of its wide scale has
been resolved through web enabled Management Information System.

   „

NREGS, became a path-breaker by changing the notion of viewing social protection as a right of
citizenship. The concept of ͚guaranteed social minimum͛ where entitlement extends beyond just cash and
food transfers, and that is based on citizenship and not philanthropy, took root.

mc m

c͞Guarantee͟, says the notable Economist Mahendra Dev, is the key word in NREGA. For
the first time, it makes it possible for the rural people to demand that they are to be given a job, even if it is
only at the floor rate of wages. The NREGA is also an outstanding example of how the RTI Act can be woven
into the fabric of the delivery system and the whole legal and governance paradigm. By providing competitive
but minimum wage rates with 100% compliance to all labour laws and benefits, NREGS has succeeded in
eliminating 2nd tier contractors who often exploit labourers by either under-paying them or flouting labour
laws and exploiting the poor.6
Õc
c ü 

c The Act mandates 33 percent participation for women. The Scheme has till 2009,
attracted participation of about 49% from women as compared to previously implemented Jawahar Rozgar
Yojana that had around 20% participation of women. The highest percentage has been observed in Tamil
Nadu (80%) and Rajasthan (67%). learly, women͛s empowerment, one of the auxiliary objectives of NREGA, is
being met with stellar success. About 79% of the women collect their wages on their own and keep it to
themselves.7
Õc
c mcm
cm

cSelf targeting in nature, the Programme has high levels of participation
of marginalized groups like S/ST (57%) till 2009. The scheme has managed to create awareness amongst
remote tribal areas. This increased awareness is bound to have far-reaching effects in the long run.
Õc
c c c mc c 
c A major success for NREGS is the fact that it has brought down the
levels of distress migration from rural to urban areas. As a result, the net standard of living has seen an
increase across the social spectrum in both rural and urban areas.


c Õ


c c c  m
c Besides the legal guarantee of 100 days of work in a financial year, NREGA
households are also assured of basic minimum income per day. Post-NREGA, there has been a revision of
minimum wages across the country in last three years, and the national average daily wage rate has increased

5
http://jurisonline.in/2009/08/the-national-rural-employment-gurantee-act-nrega-2005-and-its-impact-on-economic-development
6 7
http://www.hinduonnet.com/fline/fl2219/stories/20050923005402200.htm http://knowledge.nrega.net/777/1/NREGA-PPT.pdf

5|P a ge
from Rs. 75 to Rs 80 in FY08-09. Higher incomes are expected to raise household savings, accelerating
economic diversification and household investments in human capital.8
Õc
cm

mc c
mc

c
Evidence through independent studies indicates enhancement of agricultural productivity (through water
harvesting, check dams, ground water recharging, moisture content improvement, and micro-irrigation),
stemming of distress migration, increased access to markets and services through rural connectivity works,
supplementing household incomes. The completion of the various development schemes has increased the
fertility of agricultural lands and increased the water table too helping farmers who are now comparatively
less dependent on the monsoons.



cm c 

cThe Government of India ʹ United Nations Development Programme (GoI-
UNDP) launched a project ͞Support to Operationalization of the NREGA͟, the Ministry of Rural Development
and UNDP are working towards improving functional literacy of the target population through various
schemes such as films to train stakeholders. This programme is currently running functional literacy
interventions in 13 villages.9 This has met with significant success especially among women who are now able
to comprehend the entries on the entries on their job cards and bank books and be better informed. c

   „

The need to evolve a mechanism to supplement existing livelihood sources in rural areas was
recognized early during Development Planning in India. Short term wage employment programmes were
started as pilot projects in early 60͛s and were translated into a full-fledged wage-employment programme in
1977 in the form of Food for Work Programme (FWP). Impetus for the NREGA came from two sources. The
firstc comprised c  
 c
c  c c c  c   that had been agitating for ending hunger by
providing employment guarantees to the poor. The 
 and most direct influence came from the three-
decade-long track record of the  
c
m
c c c
cm m!"# EGS in Mahrashtra
originated as relief programmes in the wake of a severe drought in the early 1970s. The EGS inspired a number
of programmes, starting with the National Rural Employment Programme in the 1980s and ending with the
Sampoorna Grameen Rozgar Yojana, which, along with the National Food for Work Programme was merged to
launch Employment Guarantee Programme under NREGA.
  „

During 2004 elections, ongress included guaranteed employment as one of the programmes in their
election manifesto called ͚common minimum programme͛. After the elections, the bill for guaranteed
employment was drafted by National Advisory ouncil (NA) consisting of members like Jean Dreze, a Belgian
born economist, at the Delhi School of Economics and Aruna Roy, Magsaysay award-winning social activist,
who were main proponents of the act.
However, when bill passed hands to the Planning ommission there was $ mc  
for the
͞guaranteed employment͟ clause, arguing that it would make implementation of the programme  c 
and would 
m c c  c  subsequently. Also, most of the ongress ministers had reservations
about the clause. This led to omission of the ͚guaranteed employment͛ clause from the bill and the modified
bill was introduced in Parliament on 21st December 2004.
8
http://nrega.nic.in/all_Paper.pdf
9
The HINDU Business Line Friday September 3, 2010, Subsistence with Guarantee by Rahul Banerjee
10
www.empowerpoor.org/.../Status%20of%20NREGA%20in%20PAS%20states.pdf
6|P a ge
 Exclusion of the clause resulted in vehement protest from activists and proponents of the act. Jean
Dreze, Aruna Roy, NGO members and other activists tried to persuade government by various measures like
holding a signature campaign or gathering support from BJP and left parties. Meeting with senior congress
leaders they tried to justify the need for demand driven employment. The persuasion by activists for more
than two months resulted in reintroduction of the bill in Parliament in August 2005. After much of debate, the
consensus was reached. NREGA would retain the guaranteed employment for 100 days and not a complete
year as was proposed initially. Also, the programme was restricted to rural India only, neglecting urban poor.
The bill was passed on 23rd August 2005 and after the President͛s approval it was enacted in February 2006.
The scheme was first introduced in 200 of the most backward districts of the ountry under phase I. It
was implemented in an additional 130 districts in Phase II 2007-2008. The Scheme was further extended to the
remaining 274 rural districts of India from April 1, 2008 in Phase III.11

„
  
 „ 
Since its inception, massive public funding has been pumped into NREGS. As on 31 March 2010, the
Ministry of Finance has released INR 784 billion under NREGS, and if the 2010-11 budget is included, the figure
jumps to INR 1.185 trillion, making it the  m% cm csocial welfare scheme. Because of its large scale and
uncertainty, opponents criticized it for unnecessarily increasing the fiscal deficit of the country. The idea of
NREGA itself has been accused of being just anc
 cm m

rather than creator of any durable rural
infrastructure.
Even the roadmap for NREGS implementation hasn͛t been an unqualified success. During its initial
phase, it had to face opposition from the class of rural contractors since the whole scheme bans the
contractors in the process. Social issues such as illiteracy, caste based discrimination, resistance from elites in
villages and gender inequalityc acted as hindrances, crippling the execution of the programme in the early
phase.
Over the last four years, implementation trends do not seem to vindicate the basic objectives of the act. There
has been lack of technical and administrative workforces to monitor, execute and evaluate the work done as
part of the scheme. According to a survey 34% of staff didn͛t get proper training. Demand for basic amenities
like safe drinking water, first aid box and shades for workers have not been fulfilled at various places.
Distribution of job cards has not been up to the mark; percentage of issued job cards varies across the states.c
Also denial of registration to single-women headed households, physically challenged individuals and
discrimination based upon caste has been noticed in some states. Initially wage payments were based on
schedule of rates (SOR) which valued the work done by the individual based on standards set during
contractor era. This didn͛t provide those true wages for their work.
Like any other government based scheme corruption has led to its deterioration. Job cards have been
snatched from the poor people and given to the elite in the villages. At many instances work sanctioned as
part of the scheme has been of personal interest to the head of the villages. Sometimes less motivated people
give half of their wages to the job evaluators and get away with the work. Delay in wage payments is another
big issue that hampers its effectiveness. According to a recent survey, payments were never delayed in 42.78%

11
http://www.gktoday.in/2009/07/national-rural-employment-guarantee-act.html

7|P a ge
of the 1000 surveyed villages, sometimes delayed in 45.52% of the villages and always delayed in 3.39%
villages.12
Principles, such as accountability of Panchayati Raj Institutions, stakeholder participation and social
audits are inherent in the NREGA architecture to overcome these issues, but they are yet to be effectively put
into place. However, with time the whole scheme has been evolving and the Ministry of Rural Development
has taken some prominent steps to overcome some of these barriers that came across as a barrier to its
effective implementation.


c c c
cc
cm
c 
cTraining sessions have been held with the officials
of the line departments to ensure clarity about the execution of the work under NREGA. Interactive sessions
have been organized to remove their doubts and to bring transparency in the execution of works. Thus far, 6.2
lakh PRI functionaries and 4.82 lakh vigilance and monitoring committees have been trained (up to July'08).13
The entral Government is also providing technical support in key areas of communication, work planning, IT,
social audits and fund management at all levels of implementation to the state governments.

üc  
c

c 
 c 
c  c 

c Government has attempted to make the process of wage
payment more transparent through use of banks and post offices. Every person as part of the scheme has to
open a bank account in the nearest government sanctioned branch. This ensures two things; first it separates
the implementing agency from the payment agency; second, only people listed on muster rolls are entitled for
payments. Biometric ATMs are the next step taken by the government which will again help in alleviating
problem related to wage payments.

& c c 
  c  c 
m c 



c Thec Large scale of operation of NREGS makes it difficult to
maintain the data on paper. Hence the government has implemented MIS to centralize the data so that the
effectiveness of the programme can be gauged in a better way. MIS places all critical parameters such as shelf
of projects, sanctioned works, wage payments, number of days of employment provided and works under
execution online for easy public access. Data engineered software has been designed for cross verification of
records and generation of alerts to support proactive response by management.
Smartcards/hand held devices has been provided to people, which carries all the information of the workers
and captures all the transactions like registration, demand of work, allotment of work, payment through
branchless banking, etc.
'm 
c    c 
 c c 

c Logistic plans have been prepared to ensure regular checking of
works in the villages by the officials. Initially gram Panchayats and line departments used to execute the
estimation of the works on SR basis and money was being released without any appraisal. Hence, a technical
wing headed by executive engineers was formed; which checks all the estimates prepared by the Gram
Panchayats and line departments under NREGA guidelines and ensure its execution properly. In 2009-10, 260
National Level Monitors and Area Officers have undertaken field visits to each of the 330 Phase I and Phase II
districts at least once to monitor and evaluate the work.

12
http://64.74.118.102/2010/01/28213720/Survey-shows-most-villages-are.html
13
India Year Book 2010, Government of India Pub. Page no.848-850

8|P a ge
 Recently a committee of 6 members was created by the Prime Minister to fill the loopholes in the
existing Act and study the various aspects affecting the execution of the programme. A senior official of the
Ministry said that the government is doing this to create a framework for NMNREGA-2.

„ 

 

NREGA as an 


has played a critical role in providing a measure of inclusive growth which is
important for sustainable development. It not just a scheme to provide people with monetary benefits but it
has given them a mc c m, to re-establish the 
 c c
m, to ensure their economic & democratic
rights and 

 , to create labour intensive infrastructure and assets, and to build the 

cm
mc
  of our country. It has energised, mobilised,  m, and delivered to India͛s poorest and most
m
 cm
mc !c
Its biggest role as a creator of c 
m c
 for the marginalized rural people has been fruitful to
an extent. It has acted as an entry point for their cm
in Gram sabhas and other institutions of
local governance and has helped them raise their social status. It has also led to formation of worker unions in
villages, thus helping in increase of our c . It has enhanced purchasing power among workers,
increasing their overall standard of living. It is too early to see drastic transformation but its potential to do so
is undoubtable.
It has opened up a

(
cc  for the poor, with a consequent, legally-mandated obligation on
the administration to deliver. Like RTI, it holds bureaucracy directly accountable for their inconsistencies.
Expenditure done on the work and workers has to be put on the website. At some places )
c
 m
c
 c)Õ has been created and walls of government buildings have been painted with the details of the
ongoing projects. Wage payments through NREGA have initiated the  c

c


cm, with the
requirement that all wage payments be made through banks and post offices. More than 5.7 crore savings
bank accounts have been opened in rural areas with banks and post offices under NREGS.14ccIt also assures an
adequate, realistic m  
c  mc 
 mc *
 , at around 6 % of total costs. It helps panchayats
become properly resourced so that there is no excuse for the failure to carry out all transparency measures
and put an effective grievance redressal mechanism in place.
When it comes to rural development+c NREGA has been able to create a difference because of its
magnitude and scopecof execution. According to Jean Dreze, one of the visionaries of NREGA, ͞the technical
standards of the work involved in NREGA are low but still it has been productive͟. They can improve the
technical standards by providing better scientific support, for instance, by developing creative blueprints for
labour-intensive work. Because of NREGA, farmers have come back to the land they long abandoned in an
atmosphere of renewed hope and have spurred their investment in land. Thus, the Act has led to an economic
development to a marked extent.
Improvements can be made by expanding the  c c c  m done under NREGA. Educated
unemployed people can be appointed as worksite supervisors, technical assistants, record keepers, social
auditors, etc. There is a strong and immediate need to  m
cm
 which include 
m

cm
c
mm  in seven days, social audit twice a year, and mandatory transparency and proactive disclosure of
work and wage payments Worksites for NREGA can also be used for improving the Healthcare, child nutrition
care in villages which remains a severe problem for the country. Local NGO͛s should be made an active part of

14
http://www.financialexpress.com/news/bank-account-must-no-cash-payment-for-nrega-wage/416726/
9|P a ge
the program as they might have a better understanding of the needs of the people and can help in
implementing NREGA by overcoming its existing barriers. Due recognition should be given to groups who have
done well various projects under NREGS which will help improve the human development index of India.
In order to optimize the multiplier effects of NREGA, the Ministry has set up a Task Force to look at the
possibility of convergence of programmes like National Horticulture Mission, Rashtriya Krishi vikas Yojana,
Bharat Nirman and Watershed Development with NREGA. These convergence efforts will add value to NREGA,
works and aid in creating durable efforts and also enable planned public investments in rural areas.
The success of the NREGA, however, will depend on people͛s realization of the Act as a right. Effective
levels of awareness and sustained public pressure are crucial to ensure that the implementation problems are
addressed and the objectives are met.

Ñ


 m   

This study of NREGS has illustrated to us, as to how ͚great social ideas͛ can be successfully incorporated into
Public Policy if they find the right support. The idea of Employment Guarantee as a means of social safety was
a combined brainchild of visionaries such as Jean Dreze, Aruna Roy and Madhav havan. Their ideas were met
at the right time by the UPA which promised guaranteed employment in its Election Manifesto. This
confluence of ideas led to formation of a powerful interest group with common goals.
Any Organizational programme has to grow with the five R͛s namely, Risk, Renewal, Regulation,
Relationships and Reputation15. NREGS has continuously evolved since NREGA to NREGS and now MNREGS. It
is continuously adapting to dynamic societal needs and externalities. This constant refining is the reason for
the scheme͛s significant success, which has come in for great appreciation from many frontiers.
Another major takeaway has been the huge scale of the programme and the huge number of
stakeholders involved at various stages. Though this programme did not meet with any major opposition from
a policy perspective, its implementation was riddled with quite a number of barriers. The best practices from
various programmes have been incorporated to address the concerns of certain sections and even in the
current period of time, MNREGS is constantly evolving. Thus, the power of collaborative policy making to build
social capital and the need to have a powerful interest group at the driver͛s seat is well understood.





15
Stanford Social Innovation Review, Summer 2007
10 | P a g e
 
600

500

400
Funds by States
300

200 entral Release (In Rs

Billion)
100

0
2006-07 2007-08 2008-09 2009-10

!" Budget Allocation for NREGA from 2006-10

ü mc c.,##/."#
Water
conservation
20%
Irrigation
Facilities
6%
Remaining
Work Rural
60% onnectivity
7%
Other Land
Activities Development
1% 6%

!, Work differentiation under NREGA 2009-10

100%
90%
80%
70%
60% Others
50% Women
40% STs
30% Ss
20%
10%
0%
2006-07 2007-08 2008-09 2009-10

!- Inclusion of marginal groups in NREGS from 2006-10

11 | P a g e
 A.4 State-wise complaints against NREGA16

16
http://www.google.co.in/imgres?imgurl=http://www.livemint.com/images/AE80982-AA90-4B6-80B3-8B19AA13D01ArtVPF.gif
12 | P a g e
 
m

c
1.c http://www.gktoday.in/2009/07/national-rural-employment-guarantee-act.html
2.c http://www.slideshare.net/ginosmit/nrega-national-rural-employment-guarantee-act-guidelines-eng-
presentation
3.c http://www.scribd.com/doc/2176739/Two-Years-of-NREGA
4.c http://jurisonline.in/2009/08/the-national-rural-employment-gurantee-act-nrega-2005-and-its-impact-on-
economic-development
5.c http://www.hinduonnet.com/fline/fl2219/stories/20050923005402200.htm
6.c http://knowledge.nrega.net/777/1/NREGA-PPT.pdf
7.c http://nrega.nic.in/all_Paper.pdf
8.c The HINDU Business Line Friday September 3, 2010, Subsistence with Guarantee by Rahul Banerjee
9.c www.empowerpoor.org/.../Status%20of%20NREGA%20in%20PAS%20states.pdf
10.chttp://www.gktoday.in/2009/07/national-rural-employment-guarantee-act.html
11.cStanford Social Innovation Review, Summer 2007
",!chttp://hoshiarpur.nic.in/Transparency_in_NREGS.htmc
"-!chttp://www.mainstreamweekly.net/article1256.htmlc
"0!chttp://ibnlive.in.com/news/nrega-money-scam-hits-andhra-pradesh/128634-3.htmlc
"1!chttp://infochangeindia.org/201002048150/Poverty/News/Lapses-in-NREGA-implementation-admitted-on-
anniversary-day.htmlc
"2!chttp://www.financialexpress.com/news/bank-account-must-no-cash-payment-for-nrega-wage/416726/c
"3!chttp://www.scribd.com/doc/2176739/Two-Years-of-NREGAc
"4!chttp://www.scribd.com/doc/3043853/NREGA-BANK-PAYMENTSc
"/!cIndia Year Book- 2010, Government of India Publicationsc




13 | P a g e