According to a report by the Social Audit Society (SAS), Bihar government has failed to meet the deadline set by the Rural Development department to recover MGNREGS (Mahatma Gandhi Rural Employment Guarantee Scheme) funds misappropriated during 2019-20.

About Mahatma Gandhi national rural employment guarantee scheme (MGNREGS)

  • Under the 2005 act, hundred days of guaranteed wage employment must be provided each financial year to every rural household whose adult members volunteer to do unskilled manual work.
  • The MGNREGS as envisaged under the act is a demand driven scheme.
  • Under the act, the central government is supposed to meet the cost of wages and three fourths of material cost of the scheme and a percentage of administrative cost.
  • The state governments are supposed to pay the unemployment allowance, one fourth of material cost and administrative cost of state councils.
  • The act provides for an unemployment allowance for those persons who were not given work despite an application seeking employment payable within 15 days of the application.


The Parliamentary Standing Committee Report of the Ministry of rural development and Panchayati Raj has highlighted major challenges and recommended following changes:

  • Enhancement of budget for MGNREGA: A Parliamentary Standing Committee Report of the Ministry of rural development and Panchayati Raj has recommended enhancing the budget for implementation of work under the MGNREGA, 2005
    • The committee has observed that the revised estimates for the last 4 to 5 years had been going up in keeping with the increased demand for work.
    • The government has itself acknowledged the surge in demand for work in 2020-21 because of reverse migration and the consequent dependence on MGNREGA work as a last resort of solace.
  • Higher wages and increased number of days: The committee has also recommended higher wage rates and an increase in the number of person days to 150 from present 100 days.
  • Blame game between Centre and states: The committee has said that the blame game is completely unacceptable and the need of hour in a federal form of government is not finger-pointing since it is detrimental for a public welfare scheme but working in unison with the common goal of upliftment of lives of the rural masses.
  • Huge pendency of wage liabilities: The committee has highlighted the pending wage liabilities and noted that the beneficiaries of the scheme were people whose hopes for a decent upliftment of their economic status hinged upon the success from the scheme and has asked the ministry to address the issue of pendency of wage liabilities.
  • Average number of days of employment: The average number of days of employment per household was 31.68 in 2021-22(till August 2021), 51.52 in 2020-21, 48.4 in 2019-20 and 50.88 in 2018-19.
    • Among the BIMARU states, the average was below the national average in Uttar Pradesh, Uttarakhand, Bihar and Jharkhand.
  • Lack of internet facilities at gram Panchayat level: The problem in muster roll updation resulting in delayed payment of wages has been attributed to lack of internet facilities at the gram Panchayat level.
    • About 1.25 lakh gram Panchayat had Bharat Net but as internet networks are not available, muster rolls could not be filled out or updated.
  • Wide gap between job cards issued and actual employment: The large number of job cards issued each year since 2018-19 was also a reflection of the crisis.
    • There was a wide gap between the job cards issued and actual employment provided to households.
    • For instance in 2018-19, 1334.63 lakh  job cards were issued but only 526.6 lakh households were provided employment.
  • Disparity in wage rates: there is a wide variation in wage rates, it ranges from as low as Rs.193 in Chhattisgarh and Madhya Pradesh and Rs.198 in Bihar and Jharkhand to Rs.318 in three Gram panchayats in Sikkim.
    • The majority of states were found to be paying less than Rs.250.
    • The committee has expressed concern at high cost of living, inflation and price rise of essential commodities and that the scheme beneficiaries, all belonging to marginalised sections, were surviving on such amounts.
    • The committee has highlighted that the low wages were one of the major reasons for people opting out of the scheme. 
    • A proposal to have a Consumer Price Index (Rural) instead of the present Consumer Price Index (Agricultural Labour) had not been considered.


  • The scheme was the last fallback option for numerous bullet people. It is high time that the scheme needs to be revamped in the view of changing times and the pandemic.
  • The committee has also expressed concerns regarding low rates of social audits and suggested that social audits should be placed in public domain. It has also highlighted the failure of the ministry to appoint ombudsmen as mandated under the act.
  • Most experts have argued that the government needs to put money in the hands of the people in order to generate demand.
  • Given the nature of the crisis and sluggishness in the recovery of economic activity, many experts and social scientists have been demanding enhancement of both urban and rural wages, increasing the number of days of employment and initiation of an urban employment guarantee scheme. 

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