The Mahatma Gandhi National Rural EmploymentGuarantee Act (MGNREGA) is an Indian job guaranteescheme, enacted by legislation on August 25, 2005.
The scheme provides a legal guarantee for one hundreddays of employment in every financial year to adult membersof any rural household willing to do public work-relatedunskilled manual work at the statutory minimum wage ofRs 120 (US$2.64) per day in 2009 prices.
The Central government outlay for scheme is 40,000 crore(US$8.8 billion) in FY 2010–11.The law was initially called the National Rural EmploymentGuarantee Act (NREGA) but was renamed on 2 October2009.
Under the MGNREGA the Central Government meets thecost towards the payment of wage, 3/4 of material cost andsome percentage of administrative cost.
State Governments meet the cost of unemploymentallowance, 1/4 of material cost and administrative cost ofState council.
Since the State Governments pay the unemploymentallowance, they are heavily incentivized to offer employmentto workers.
However, it is up to the State Government to decide theamount of unemployment allowance, subject to the stipulationthat it not be less than 1/4 the minimum wage for the first 30days, and not less than 1/2 the minimum wage thereafter.
100 days of employment (or unemployment allowance) perhousehold must be provided to able and willing workers everyfinancial year.
The MGNREGA achieves twin objectives of ruraldevelopment and employment.
The MGNREGA stipulates that works must be targetedtowards a set of specific rural development activities such as: •water conservation and harvesting •afforestation •rural connectivity •flood control •construction and repair of embankments etc. •Digging of new tanks/ponds •percolation tanks •construction of small check dams etc
Source: •www.nrega.nic.in•www.en.wikipedia.org Thank You
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