Dipak Kurmi
The Mahatma Gandhi National Rural Employment Guarantee Act (NREGA) stands as a monumental social security initiative, marking its twentieth anniversary as a landmark statutory right. Envisioned as a realization of Article 41 of the Indian Constitution, which directs states to ensure the right to work, this revolutionary legislation was passed by Parliament on August 23, 2005. It granted rural households the legal right to 100 days of unskilled manual labor at a government-specified wage, with one-third of these jobs reserved for women. The program has since evolved into the world’s largest public works and social security scheme, hailed even by the World Bank for its significant contribution to rural development, poverty alleviation, and economic resilience.
The essence of NREGA lies in its role as a proxy for unemployment insurance. Unlike developed economies where unemployment benefits are distributed through a structured employment exchange system, India, with its largely unorganized labor market, required a different approach. The NREGA framework ensures that when rural job opportunities dwindle—especially during periods of distress such as droughts, famines, or economic downturns—an alternative source of livelihood remains accessible. This was particularly evident during the COVID-19 pandemic, when the demand for NREGA work surged dramatically, pushing annual expenditures to nearly ₹1.2 lakh crore and generating over 300 crore person-days of employment.
Beyond merely offering wage-based employment, NREGA has had far-reaching socio-economic impacts. By guaranteeing minimum wages, it has provided a safety net for millions of marginalized workers, shielding them from exploitative labor conditions. Women’s participation has been notably high, fostering economic independence and enhancing their role in household decision-making. Additionally, NREGA mandates certain amenities at worksites, such as creches for working mothers, thus promoting an inclusive work environment. Moreover, the program contributes to rural infrastructure development through the construction of irrigation ponds, check dams, roads, afforestation projects, and even housing in some states. This dual benefit of providing employment while simultaneously creating durable public assets underscores NREGA’s transformative impact on rural India.
However, the program has faced criticism and challenges. A major contention has been from landlords and private employers, who argue that NREGA creates labor shortages by offering an alternative employment option. Since NREGA wages set a minimum benchmark, private employers are compelled to raise wages to attract laborers—an unintended but beneficial effect in ensuring fairer compensation. Another persistent issue is corruption and leakages in fund allocation. Despite biometric verification and Aadhaar linkage, ghost entries in muster rolls and misappropriation of funds have been reported. Social audits, especially in states like Rajasthan and Andhra Pradesh, have proven effective in curbing such malpractices, highlighting the need for stricter oversight.
One of the most pressing concerns today is the delayed payment of wages. Given that NREGA workers rely on daily wages for subsistence, even a delay of one or two weeks can be catastrophic. Recent reports suggest that nearly ₹975 crore in payments has been severely delayed, causing immense hardship to millions of workers. Addressing these inefficiencies is critical for sustaining the program’s credibility and effectiveness. Moreover, technological glitches in biometric authentication systems, power failures, or banking issues can lead to wrongful denial of wages, underscoring the need for a robust fallback mechanism.
Despite its flaws, NREGA remains indispensable in India’s social security framework. Some experts have suggested an urban employment guarantee scheme modeled on NREGA to address urban unemployment. Several states have even considered implementing such programs. Moreover, the program’s evolution from early public works experiments—such as Maharashtra’s Employment Guarantee Scheme (1973), which was self-funded through taxation—demonstrates its adaptability in responding to changing economic conditions.
As India moves towards greater economic inclusivity, NREGA continues to serve as a crucial policy instrument, bridging the gap between economic downturns and employment security. While additional welfare schemes such as free food grain distribution, PM-Kisan, and Ladli Behna Yojana have supplemented social protection, the demand-driven nature of NREGA ensures that rural employment remains a guaranteed right rather than a discretionary benefit.
As NREGA enters its third decade, it is essential to refine its implementation, eliminate bottlenecks, and integrate new technological solutions to enhance transparency and efficiency. The program stands as a model for social security, not just for India but for developing economies worldwide. Its success underscores the importance of government intervention in ensuring economic dignity for its most vulnerable citizens, making it a cornerstone of India’s development narrative.
(The writer can be reached at dipakkurmiglpltd@gmail.com)
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