The Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) is an Indian job guarantee scheme that provides at least 100 days of employment per year doing unskilled manual labor at minimum wage to members of rural households willing to do public work. The Central government allocates 40,000 crore (US$8.8 billion) annually for the program. It aims to achieve rural development and employment generation through activities like water conservation, afforestation, rural connectivity projects, and flood control works.

2. The Mahatma Gandhi National Rural Employment
Guarantee Act (MGNREGA) is an Indian job guarantee
scheme, enacted by legislation on August 25, 2005.

3. The scheme provides a legal guarantee for one hundred
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 of
Rs 120 (US$2.64) per day in 2009 prices.

4. 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 Employment
Guarantee Act (NREGA) but was renamed on 2 October
2009.

5. The Plan

6. Under the MGNREGA the Central Government meets the
cost towards the payment of wage, 3/4 of material cost and
some percentage of administrative cost.

7. State Governments meet the cost of unemployment
allowance, 1/4 of material cost and administrative cost of
State council.

8. Since the State Governments pay the unemployment
allowance, they are heavily incentivized to offer employment
to workers.

9. However, it is up to the State Government to decide the
amount of unemployment allowance, subject to the stipulation
that it not be less than 1/4 the minimum wage for the first 30
days, and not less than 1/2 the minimum wage thereafter.

10. 100 days of employment (or unemployment allowance) per
household must be provided to able and willing workers every
financial year.

11. Funding

12. MGNREGA started with an initial outlay of $2.5bn(Rs11300cr)
in year 2006–07. The funding has considerably been
increased as shown in the table below:

13. Works

14. The MGNREGA achieves twin objectives of rural
development and employment.

15. The MGNREGA stipulates that works must be targeted
towards 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

17. Source:
•www.nrega.nic.in
•www.en.wikipedia.org
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