Over the years, due to concerted efforts, the percentage of households below the poverty line has come down substantially in India. It is now widely recognized that eradicating rural poverty can be achieved only by expanding the scope for non-agricultural employment. Many programmes to generate additional employment had been introduced over the years. Many were merged with the employment guarantee scheme, which is now the biggest programme on this front in the country. T he National Rural Employment Guarantee Act (subsequently renamed MGNREGA) was passed in 2005, with the aim of providing livelihood security to poor rural households. T his was to be achieved by giving at least 100 days of wage employment each year to adult members of every household willing to do unskilled manual work. This would provide a cushion to poor rural households which could not get any work in the lean agricultural season which lasted for about three months each year. In this exercise, the work undertaken would create durable assets in rural areas like roads, canals, minor irrigation works and restoration of traditional water bodies. T he earlier targeted programmes of rural development were based on the identification of below poverty line families, which had led to several complaints that ineligible families had been selected. MGNREGA, however, is applicable to all rural households. The reasoning is that it is a self-targeting scheme, because persons with education or from more affluent backgrounds would not come forward to do manual work at minimum wages. T he earlier employment generation programmes did not give the rural poor any right to demand and get work. The significant feature of this Act is that they have the legal right to demand work. The programme is implemented by Gram Panchayats. The applicants have to apply for this work and are provided with job cards. Work is to be provided by the local authorities within 15 days. If not, the applicant is entitled to an unemployment allowance. The work site should be located within 5 kilometres of the house of the applicant. No contractors are to be involved. This is to avoid the profits which will be taken by the middlemen thus cutting into the wages. The ratio of wages to capital investment should be 60:40. One-third of the workers would be women. Men and women would be paid the same wage.
As with all government programmes, many studies have brought out the weaknesses in the implementation of MGNREGA. The programme is not free of corruption, and employing contractors is also common. On the positive side, agricultural wages have gone up due to the improved bargaining power of labour. This has also reduced the migration of agricultural workers to urban areas during the lean period or during droughts. One of the most important benefits is that women are participating in the works in large numbers and have been empowered by the programme. Some of the corruption and leakages have been plugged now that the wages of the workers are paid directly into bank accounts or post office accounts. The involvement of civil society organizations, non-governmental organizations and political representatives, and a more responsive attitude of the civil servants have improved the functioning of MGNREGA in states like Andhra Pradesh and Rajasthan. Efficiency has increased up to 97%. Between 2006 and 2012, around Rs.1,10, 000 crores had been distributed directly as wage payment under the programme, generating 1200 crore person-days of employment. In spite of many shortcomings, the functioning of the programme has improved due to higher levels of consciousness among the rural poor and concerned civil society organizations. Though many critics feel that the high expenditure involved in the programme increases the fiscal deficit, the programme remains popular and nearly one-fourth of all rural households participate in the programme each year.