Context:
While the scheme saw a rise in household registrations, actual delivery of promised employment has declined. This disconnect between enrolment and actual workdays points to deeper implementation challenges. The scheme’s legal guarantee of 100 days of employment is not translating into practice for the majority of beneficiaries.
About MGNREGA
- Full Name: Mahatma Gandhi National Rural Employment Guarantee Act
- Launched: 2005
- Administered by: Ministry of Rural Development, Government of India
- Purpose: Guarantees 100 days of wage employment to rural households for unskilled manual work; aims to enhance rural livelihood security and create durable rural assets.
- Key Features:
- Demand-driven and legally enforceable right to work
- Wage payment within 15 days, with compensation for delays
- Emphasis on transparency via MIS, geo-tagging, and social audits
Key FY 2024–25 Findings (LibTech India Report)
Mismatch Between Registrations and Work Delivered
- Registrations: Rose from 13.80 crore (FY24) to 14.98 crore (FY25) → ↑8.6%
- Employment Delivery: ↓7.1%; only 7% of households received the full 100 days of employment
- Average Person-days: Dropped from 52.42 to 50.18 days/household → ↓4.3%
- Fund Utilization: ₹82,963 crore spent, exceeding the ₹86,000 crore budget → Utilization at 106%
State-Level Trends
- Decline in:
- Odisha: −34.8%
- Tamil Nadu: −25.1%
- Rajasthan: −15.9%
- Increase in:
- Maharashtra: +39.7%
- Bihar: +13.3%
Wage Payment System Issues
Two-Stage Payment Process
- Stage 1 (State): 8-day timeline for muster roll, measurement, wage list, and FTO generation.
- Stage 2 (Centre): 7 days for wage credit after FTO from state.
Delay Compensation Formula
- 0.05% per day beyond 15 days from muster roll completion
- Actual Compensation Paid: Only 3.76% of eligible delayed payments were compensated
Major Challenges Identified
- Delayed Payments:
- 71% of Stage 2 (central) payments were not made within the legal 15-day window
- Delay Disparity: SC (80% on-time), ST (63%), Others (51%)
- Insufficient Budget:
- ₹86,000 crore not enough for rising work demand
- Overspending indicates mismatch between demand and allocation
- Caste-based Payment Segregation:
- SC/ST workers prioritized; Others face longer delays → violates non-discriminatory wage rule
- Technical Failures in Payments:
- Aadhaar-based payment system (APBS) often fails due to NPCI mapping errors
- ₹4+ crore in failed wage transfers, especially in Chhattisgarh (11.4% rejection rate)
Recommendations / Way Forward
- Increase Budget Allocation:
- Raise funds to ₹1.5–2 lakh crore to match growing demand
- Simplify Payment Mechanism:
- Shift from Aadhaar-based payments to direct bank account transfers
- Ensure Automatic Compensation:
- Enforce real-time systems to trigger automatic compensation for delays
- End Caste-Based Segregation:
- Ensure uniform treatment of all workers in payment processing
- Strengthen Monitoring & Transparency:
- Use real-time dashboards and grievance redressal mechanisms
