Centre’s approach has eroded the very premise of employment guarantee as a legal right

Contact Counsellor

Centre’s approach has eroded the very premise of employment guarantee as a legal right

  • Centre’s approach has eroded the very premise of employment guarantee as a legal right.


  • Organisations such as the All India Kisan Sabha and NREGA Sangharsh Morcha (NSM) have raised concerns about the inadequacy of the amount.
  • Grassroots activists and academics have been demanding higher budgetary allocations for MGNREGA; yet, the actual allocations have been considerably lower and severely inadequate to meet needs.
  • The initial allocations in the past two FYs have been just about half of what was recommended by groups like the People’s Action for Employment Guarantee (PAEG) and NSM.
  • The consistent shortage of funds has caused deficits for State governments, long delays in wage payments, a decline in the work provided in the last two quarters of the FYs, and significant pending dues at the end of the FYs.

Projected person-days

  • The budget calculations depend on two important variables: the projected person-days for the coming year, and the wage rate.
  • Projected person-days are the total days of work anticipated for the year.
  • The District Programme Coordinator is responsible for calculating this and submitting it to the State, which in turn collates the entire State’s projected demand and submits it to the Centre for approval.
  • The MGNREGA MIS Report has the monthly projections approved by the Centre, along with the actual person-days generated.
  • A closer look at these figures for the last two years reveals some discrepancies.
  • In FYs 2019-20 and 2020-21, the person-days generated was about 18.4% higher in Q4 when compared to Q3.
  • However, the projected person-days for Q4 in FY 2021-22 appeared to be strangely and significantly lower than that in Q3.
  • FY 2020-21 was an unusual year, with the pandemic and the subsequent lockdown measures leading to significantly increased MGNREGA work demand.
  • There seems to be no clarity on how the projection was arrived at, given previous trends, and given that with the harvest concluding MGNREGA work has traditionally picked up in Q4.
  • However, what it does suggest is that the government had not revised its projections for the final quarter of this FY even while it announced supplementary grants worth ₹25,000 crores for MGNREGA in December 2021.
  • There have been attempts by the government to curb work demand based on the availability of funds.
  • Since budget allocations are based on projected person-days, underestimated projections will lead to inadequate allocation.

Wage rate

  • The official MGNREGA wages also contribute to keeping the budget low.
  • Despite a clear mandate of the MGNREGA Act that the wage remuneration cannot be lower than the minimum wage in each State, the former remains much below the latter.
  • In doing so, the Central government has violated the provisions of the Act, as well as the fundamental rights of MGNREGA workers.
  • There have been estimates devised of what the average MGNREGA wage should be.
  • For instance, an expert committee under the chairmanship of Anoop Satpathy estimated a need-based national minimum wage of ₹375 per day as of July 2018.
  • In comparison, PAEG used a conservative estimate of ₹269 per day in its recently released pre-budget brief.
  • However, according to the NREGA ‘At a Glance report, the average MGNREGA wages paid this year remain at a meagre ₹209 per day, and the low allocation for next year indicates that the wage will not be increased by much, if at all.
  • However, even if we take the wage rate of ₹209 per day that the government is paying on average, the current FY is expected to end with dues of over ₹20,000 crores.
  • The Central government’s expenditure for this FY is expected to be over ₹1.02 lakh crore even if the wage bill, material costs, and administrative costs are to increase in a linear fashion till the end of the FY.

Way Forward

  • MGNREGA treats employment guarantee as a legal right; any rural household can demand work up to 100 days every year, and the government has to provide it.
  • As and when the demand arises, the government must fulfil it.
  • In this context, treating the budget allocation as a ‘ceiling’ to the work that can be provided, erodes the core premise of the scheme.
  • While an initial budget allocation has to be made, MGNREGA funds must be regularly replenished by supplementary grants provided based on actual work demand in each State.
  • The Centre’s approach to estimating projections, keeping the wages illegally low, and treating the budget as an upper limit to the work that can be provided has eroded the very premise of MGNREGA.