Context: In 2020-21, the central government plans to spend an unprecedented amount of funds on the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) with increased allocation by ₹40,000 crore to push it over ₹1 trillion.

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  • Keynesian economics is of the view that in tough economic times, when the private sector and individuals are not spending money, the government should become the spender of last resort to put money in people’s hands. 
  • The ratio of the total amount to be spent under MGNREGS and GDP is 0.45% .
    • Even after adjusting for growth in the size of the Indian economy over the years, the MGNREGS spending will be the highest since 2014-15.

Impact of increased MGNREGS spending on individuals

  • Till date, 23.3 million households had sought work under the scheme, for the whole of May 2019, the number was 25.1 million. 
    • As the government has reiterated MGNREGS is a fall-back option for livelihood for the rural households when no better employment opportunity is available. 
    • Households have started utilizing this option and as more migrant workers return home, the demand for work under the scheme will only go up.
  • The National Council of Applied Economic Research (NCAER) expects the Indian economy to contract 12.5% in 2020-21.
    • It also expects the  industry and services to shrink by 27.1% and 8.1%, respectively. 
  • In turn  many people may lose their jobs particularly in the informal sector
    • This, to a large extent, explains the rush among migrant workers to go back to their native places. 
    • The government needs to create work for them, along with others. 
    • The states had been advised to provide work to migrant workers, according to the provisions of the scheme.

Way Forward

  • Over the years, the government has been able to provide around 50 days of work per household
    • In 2018-19 and 2019-20, this was 50.9 days and 48.4 days, respectively. 
    • In states such as Bihar and Uttar Pradesh, that are the native places of a bulk of migrant workers the figure was much less at 41.3 days and 44.8 days, respectively. 
  • There is a need to create more work in these states and the Centre should be ready to spend more money on that front.


MGNREGA - Ministry of Rural Development

  • The Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA), also known as Mahatma Gandhi National Rural Employment Guarantee Scheme (MNREGS) is Indian legislation enacted on August 25, 2005
  • The MGNREGA provides a legal guarantee for 100 days of employment in every financial year to adult members of any rural household willing to do public work-related unskilled manual work at the statutory minimum wage. 
  • The Ministry of Rural Development (MRD), Government of India is monitoring the entire implementation of this scheme in association with state governments.
  • This act was introduced with an aim of improving the purchasing power of the rural people, primarily semi or unskilled work to people living below poverty line in rural India. 
  • It attempts to bridge the gap between the rich and poor in the country. Roughly one-third of the stipulated work force must be women.
  • Adult members of rural households submit their name, age and address with photo to the Gram Panchayat. 
  • The Gram Panchayat registers households after making enquiry and issues a job card. 
  • The job card contains the details of the adult member enrolled and his/her photo. Registered person can submit an application for work in writing (for at least fourteen days of continuous work) either to Panchayat or to Programme Officer.
  • The Panchayat/Programme officer will accept the valid application and issue dated receipt of application, letter providing work will be sent to the applicant and also displayed at Panchayat office. 
  • The employment will be provided within a radius of 5 km: if it is above 5 km extra wage will be paid.
  • Within 15 days of submitting the application or from the day work is demanded, wage employment will be provided to the applicant.
  • Right to get unemployment allowance in case employment is not provided within fifteen days of submitting the application or from the date when work is sought.
  • Receipt of wages within fifteen days of work done.


Image Source: Mint