Rights-based Legal Guarantee as

Social Protection Framework

A Discussion on the Mahatma Gandhi National Rural
Employment Guarantee Act (MGNREGA), India

Amita Sharma
Joint Secretary
Government of India
Ministry of Rural Development

Disclaimer: The views expressed in this paper/presentation are the views of the author and do not necessarily reflect the
views or policies of the Asian Development Bank (ADB), or its Board of Governors, or the governments they represent.
ADB does not guarantee the accuracy of the data included in this paper and accepts no responsibility for any
consequence of their use. Terminology used may not necessarily be consistent with ADB official terms.
Mahatma Gandhi National Rural Employment
Guarantee Act, 2005

Presentation Overview
• Policy Context
• Mahatma Gandhi NREGA: Objective
• Design
• Early Impact
• Way Ahead
 Policy Context
• Close to 300 million people in poverty in India at less than a dollar a
day. Unemployment and out of labour force days of rural agricultural
labourers in India is 104 days ( 76 days for male & 141 days for
female)
• Erosion of natural resources, growing poverty and unemployment
have lead to fragmentation of land and increase in number of
agriculture labourers from 7.08 million in 1881 to 121 million in 2008.
• The policy response to a situation of poverty and inequality has
focused on inclusive growth focusing on basic education, health and
food security.
• Greater concern for social security measures.
• Growing policy engagement with the Rights regime witnessed by the
formulation of Rights based laws as policy instruments.
• The Right to Information Act, the Forest Rights Act 2009, and recently
the Right to Education Act 2009 with the Food Security Bill (in the
offing)
• Mahatma Gandhi National Rural Employment Guarantee Act
((MGNREGA) came in this context of inclusive growth and
radicalization of State policy, foregrounding its obligation as a law.
 NREGA Objective

• An Act to provide for the enhancement

of livelihood security of the households in
rural areas of the country by providing at
least one hundred days of Guaranteed
wage employment in every financial year
to every household whose adults
volunteer to do unskilled manual work
 Right based Framework

• Adult members of a rural household willing to do unskilled manual

work may apply for registration to the local Gram Panchayat, in
writing, or orally and in return receive a Job Card.
• A Job Card is the basic legal document that enables a rural
household to demand work
• Time bound Guarantee
• Employment has to be provided within 15 days of demand else
unemployment allowance has to be paid by the State at its own cost.
• Local Employment
• Work within 5 km radius of the village or else extra wages of 10%
paid
• Wage Payment
– Wages to be paid according to the notified wage rate
– Disbursement of wages on weekly basis and not beyond a
fortnight
• Work site facilities
• Crèche, drinking water, first aid and shade at worksites
• No contractors and machinery
 Right based Framework
• Transparency & Accountability
• All information be proactively placed in public domain.
• Information demanded be given, free of cost.
• Social audits by village assembly (gram sabha) which go
beyond RTI to fix
• accountability and seek correctives.
• Grievance redressal mechanisms
• Penalties for default
• Equity
• At least one-third of workers should be women
• Disadvantaged Groups (Scheduled Castes/ Scheduled
Tribes/ Below
• Poverty Line/ Land reform beneficiaries/Small and marginal
farmers) can work on their own land
 Right based Framework
• Decentralized, Participatory Planning
• Principal role of local bodies (Panchayat Raj Institutions)
in planning, monitoring & implementation
• Local village assembly Gram Sabha recommends shelf of
projects
• Village bodies (Gram Panchayats) to execute at least
50% of works
• Labour Intensive Works
• 60:40 wage and material ratio for permissible works
• Bi-focal lens: work helps earn wages and create
productive assets.
• Natural resource regeneration addresses causes of
chronic poverty: water, fodder, land
 Design Strengths
• For the wage seeker
• Self targeting- No specific eligibility criteria
• No pre-requisite skill
• Responsive to labour demand-May be availed of any time
• Local employment
• Flexibility-drop in drop out
• Assured wage rates
• Wages through institutional accounts. 88 million accounts
opened in Banks and post offices.
• Job Card as a Record of Rights. Data on work and wages
• Access to records
 Design Strengths
• For the Government
• Legal framework
• Rapid universal scale
• Adequate budget resources. The budget support is Rs.
401 billion for 2010-1011
• Budget on demand.
• Substantial cost of employment funded by Centre.
– 90 % borne by Central Government and 10 % by State
Government
– (100% of wages, 75% of material cost by Centre)
– 6% administrative expenses by Centre
• Untied funds and the district plans for their use within
overall legal norms
• Incentive-disincentive structure: Central assistance for
providing employment. Unemployment allowance at
State cost
 Challenges
Effectiveness of Instruments of Rights depends on

• The capacity of the people to demand their Rights

• Capacity of the administrative system to
protect/enforce them.

Worker’s Rights
Right to demand is a step toward empowerment but its
exercise gets limited by
• Workers’ inabilities to read write negotiate organise:
difficult to use legal instruments to assert Rights
• Hierarchical relationships
 Capacity and structure of guaranteeing
institutions
• Functions are the heaviest at the bottom/ GP level and
the leanest at the top-Ministry level.
• But control of funds on which the entire guarantee rests
is inverse to the distribution of functions, resting
maximally with the Centre and then at each lower level,
with the GP having the least control over and access to
funds.
• Intricate network of dependencies.
• Limited capacity of PRIs specially GPs to implement a
time bound legal guarantee
• Conflicts between different institutional authorities and
responsibilities. Shared responsibilities and linked
functions make fixing accountability difficult.
 Dilemmas of the Delivery System

• The guaranteeing agency is the same as the implementing

and adjudicating agency.

As a result
• The implementing agency has little incentive to acknowledge
demand-dated receipt that can then be invoked against it for
paying unemployment allowance.
• Should the agency issuing the guarantee be separate from
the one that has to fulfill it?
• Implements the works also audits them
• Has authority for grievance redressal, while may itself be
defaulter.
• Penalties are mild and imposing them procedurally
protracted.
 Conflict of Interests
Social audit
• Social audit can be a powerful instrument for
transparency and accountability only if the community is
powerful enough to compel the local body/Govt to render
accounts and to compel action on its findings
• The gram sabha is to audit the Gram Panchayat, but the
gram sabha is convened by the gram Panchayat.

• The village community is highly stratified- socially and

economically with conflicting interests. Dependent upon
the Gram Panchayat for its functioning
• Need for external facilitation to mobilize the workers, to
activise the gram sabha, to interrogate and analyse
information and evaluate the performance of the scheme
and seek redressal for grievances.
Resolving Tensions: State Action as
Trigger for Guarantee
• Social mobilisation of workers:
• Proactive Opening works on a large scale- a
work in every village
• Focus on deprived groups, specially work on
their land
• Labour budgets-
• Anticipating labour demand and formulating a
shelf of projects to meet it
• Placing data on website for transparency
• Helps in planning, timely funding and mobilising
workers
 Governance Reform for Improved Delivery
Policy Innovations

• An independent Directorate for social audit in some States

(Andhra Pradesh. Rajasthan )
• Devolution of greater financial sanction limits to GPs ( Madhya
Pradesh, Karnataka)
• Amendment in the State Panchayat Act to make PRIs
accountable for their action under MGNREGA ( Tamil Nadu)
• Strengthening village planning in local councils through greater
women participation ( Meghalaya)
• Involvement of self-help groups for workers’ facilitation(Kerala,
Andhra Pradesh)
• Grievance redressal rules in some States
• ICT enabled help line for citizen access ( UP, Orissa)
• Setting up Ombudsman( in process in all States)
• A law is effective first, as an instrument for governance rather
than just an instrument for individual assertion of rights.
 Use of ICT: Transaction-based MIS for Transparency
• Web enabled Household based database in public domain
http://www.nrega.nic.in
• Workers’ entitlements:
– Registration, Job cards, Employment demanded and Days worked,
– Muster rolls, Unemployment allowance, Payments and compensations
due.
• Work data:
• shelf of works, Work progress,Inventory of works/assets
• Financial data:
• Financial Proposals, Funds available/spent, Amount paid as wages,
materials and administrative expenses,
• Grievances:
• Register grievances of workers and Track complaints and action taken
• Monitoring and Corrective Action: alerts for corrective action, Social Audit
findings.
• 90 million Job Cards and 20 million muster Rolls are in public
domain.
• Drillable to job card, work muster roll level.
• Worker access through icon, sound.
• ICT enabled end to end solution at GP level
• Partnership with UIDA for including NREGA workers
• Best Govt. website award
 Law as opportunity for Governance reform
Policy innovation

• Redressing grievances

• District Ombudsman being set up as independent

enquiry authority empowered to ,direct action for
redressal and penalties including filing FIR against
defaulters.
• The Ombudsman does not have judicial powers.
• However, it will provide an independent dedicated
forum for people to lodge complaints and expect
redressal
• Generate greater awareness among people of their
rights.
• Tighten administrative systems to acknowledge Rights,
ensure time bound guarantees, record maintenance
 Infrastructure of Rights
• Knowledge Resource Centres to be constructed a place at the
village level where workers can apply, records be maintained and
proper meetings and consultations take place
• Technology for enforcing Rights
• ICT with simple interface technologies using bio metrics can
enable all stages of transactions of workers’ rights from
registration, to issue of job cards work applications, issue of dated
receipts, work allocation and delay in it if any, statement of
unemployment allowances that may accrue. The same system
can be used for recording work site processes such as
attendance, measurements and payments. This will also help in
equipping them with documents like dated receipts to press their
claims for redressal
• Financial Inclusion: Inadequate reach of institutional network
and insufficient resources in the existing rural branches.
• Efforts are on to expand the business correspondent model
to unbanked areas
 Work site innovations
• Improved work site management and earnings
• Work Time Motion studies to revise task rates for fair measurement and
wage earnings.
• Training local persons as work-site mates for improved work
management. Specially effective where women trained as work -site
mates to measure and calculate( using calculators) work done.
• Helped restrain work site malpractices and just work earnings
• Strengthening the natural resource base of livelihood:
• Link with farm work:
• To augment agricultural productivity, MGNREGA work can be taken
up on the individual land of SC/ST/BPL families/ small and marginal
farmers.
• Convergence:
• Formulation of convergence guidelines between MGNREGA and
other development programmes for Agriculture, fisheries, afforestation
Water Resources, roads, Watershed Development hfor augmenting
productivity
• Key principle: Projectisation of works
• Shared problem analysis, needs identification and planning
• Bundling inputs/ resources from different programmes:
 Monitoring, Evaluation & Feedback
Internal Monitoring
• Periodic Reviews by MORD with States
• Quarterly Performance Review Committee meetings
• Regular visits by Area Officers & Ministry officials
External Monitoring
Performance Audit of NREGA implementation: 
• First CAG audit  conducted in FY 2007‐08 in Phase I districts, final report submitted
• MORD has  requested CAG to undertake the Performance Audit of implementation of 
NREGA in Phase II districts, Audit Team of CAG  to take entry conference with Ministry to 
proceed further in the matter . 
Central Employment Guarantee Council: 
• Regular Review Meetings with MORD
• CEGC State visits in FY 2008‐09 to Jharkhand, Tamil Nadu, Orissa, UP, Maharashtra
Concurrent Appraisals: 
• Annual NLM visits to  NREGA phase I, II, III districts
• 5 studies commissioned by Ministry FY 08‐09
• NREGA impact assessment on gender roles, SC/ST households, financial inclusion being 
undertaken by NIRD
• PIN
• NSSO Survey in MP, Rajasthan and AP
Parliamentary Standing Committee 
Media reports
 Knowledge Support

• Professional Institutional Network Over 84

partnerships with institutions, civil society
organizations including IITs, IIMs, Agriculture
Universities for appraisal and action research

• Partnerships with 22 States for research,

monitoring, capacity building for more effective
implementation of the Scheme

• Knowledge Network for best practice

dissemination among District Programme
Coordinators and NREGA functionaries. 1100
members at present
 Towards Inclusive Growth
(FY 2006-07) (FY 2007-08) (FY 2008-09) (FY 2009-10)
200 Districts 330 Districts 615 Districts upto Feb, 10
619 Districts
Employment provided to households: 21.0 Million 33.9 Million 45.1 Million 49.0 Million
PERSONDAYS [in Million]
Total: 905 1435.9 2163.2 2513
SCs: 229.5 [25%] 393.6 [27%] 633.6 [29%] 737.9 [30%]
STs: 329.8 [36%] 420.7 [29%] 550.2 [25%] 540.3 [22%]
Women: 367.9 [41%] 611.5 [43%] 1035.7 [48%] 1210.5 [49%]
Others: 345.6 [38%] 621.6 [43%] 979.5 [45%] 1224.8 [48%]
Average personday per household 43 Days 42 Days 48 Days 51 Days
FINANCIAL DETAIL
Budget Outlay (In Rs Billion): 113 120 300 391
Central Release (In Rs Billion): 86.41 126.10 299.40 335.07
Total available fund [including OB]: In Rs. Billion. 120.74 193.06 373.97 488.03
Expenditure (In Rs. Billion) 88.23 158.57 272.50 335.07
Average wage per day Rs. 65 Rs. 75 Rs. 84 Rs. 90
WORKS DETAIL
Total works taken up (In Million): 0.84 1.79 2.78 4.10
Works completed: 0.39 0.82 1.21 1.64
Water conservation: [54%] [49 %] [46%] [51%]
Provision of Irrigation facility to land owned by [10%] [15 %] [20%] [16%]
SC/ST/ BPL/ S & MF and IAY benificiaries:
Rural Connectivity: [21%] [17 %] [18%] [17%]
Land Development: [11%] [16%] [15%] [14%]
Any other activity: [4%] [3%] [1%] [2%]
 Gender Equity
Independent Impact Assessment of NREGA
Main findings
Women’s new found identity & economic empowerment
ƒ Taking the wages directly through their accounts
ƒ Increased spending of earnings from NREGA on food,
consumer goods, education of children and offsetting debts
ƒ Work availability in villages increased post NREGA
ƒ Decision-making power for women increased post NREGA
with additional income
ƒ Fixed working hours an incentive, work easily available
ƒ Breaking caste and community issues, socio-economic
benefits
ƒ Easy access to credits
Efforts initiated for convergence with Self Help Groups,
literacy, health-HIV Awareness through ASHA, ICDS
NREGA: Regenerating Natural Resources for enhancing
productivity and adaptation to climate change
Works related to water and land: 83%
Flood Control and Protection

9% 4% Water Conservation and Water

Harvesting
6%
Provision of Irrigation facility to
Land Owned by SC/ST/BPL/ IAY
25% Beneficiaries
Rural Connectivity
9%

1% Land Development

Others

14%
Drought Proofing (Afforestation
& Plantation)
16%
Micro Irrigation Works

16%
Renovation of Traditional Water24 bodies
(incl. desilting of tanks, ponds)
 Resilience in-built in NREGA
• Resilience is in-built in NREGA activities as they
lead to
– Food security
– Livelihood security
– Water security
– Ecological Security
– Flood risk reduction
• Focus on rural communities and resource base
• NREGA Works are likely to improve resilience and
adaptive capacity of the production systems,
farmers and communities
• NREGA programs need to be assessed for their
ability to build resilience, reduce vulnerability of
production systems and communities
 NREGA: Positive Trends & Findings
• Increase in Agriculture Minimum Wages and wage earned per day and
annual income. (Source: IIM Lucknow, NDUAT Faizabad) Bargaining power of
labour has increased
• Earnings per HH has increased from Rs 2795 in 2006-’07 to Rs 3150 in 2007-
’08 to Rs 4060 in 2008-’09
• Financial Inclusion: 8.8 crore accounts opened
• Distress migration has reduced in many parts (Source: Disha, NFIW, IHD,
CSE)
• “Green Jobs” created as nearly 70% works relate to water conservation,
water-harvesting, restoration, renovation and desilting of water bodies,
drought-proofing, plantation & afforestation
• NREGA is used as a supplementary income source during non-agricultural
seasons (Source: IIM Ahmedabad)
• Productivity effects of NREGA reported
- Improvement in ground water (Source: ASCI, IHD)
- Improved agricultural productivity & cropping intensity (Source: ASCI, IIT
Roorkee)
- Livelihood diversification in rural areas (Source: IIM Shillong, CSE, IHD)
• Reduction in water vulnerability index, agriculture vulnerability, livelihood 26
26
vulnerability index (Source: IISc)
 Factors critical to NREGA’s effectiveness

• It is a law. That makes all the difference to the inherited

design
• The law creates obligations on the State recognizing
the Right to demand work.
• The law is backed by budget resources
• Budget is responsive to development needs rather than
being predetermined and inflexible allocations that
restricts needs.
• Political will and political contestations push NREGA to
deliver.
• Even if penalties may not have been invoked the
possibility that they can be invoked, is a propellant for
implementation.
• Space for Policy innovations make MGNREGA a
dynamic law responding to challenges of implementation
 Implementation Challenges that persist
• Lack of awareness about rights and entitlements and
Workers’ inability to submit written applications and
negotiate rights.
• Gaps in delivery systems: Act out-steps existing
arrangements
-legacy mind-set: welfare provisioning Vs.
Accountability to guaranteeing Rights
-Capacity of local bodies and administrative agencies
-Poor coverage of Banks and Post Offices
-Infrastructure, including e-connectivity
• Local participatory community planning and technically
feasible integrated perspective plans
• Making assets more durable and productive without
disturbing the 60:40 ratio through convergence 28
 Way Ahead
Building capacity of workers to articulate and demand their rights
• Basic literacy skills in the workers so that they can script and interpret
their opportunities and Rights. The Adult Education Programme of the
Government should primarily target the MGNREGA workers.
• Organising Workers for better negotiation; into SHGs for weaning
towards economic activity
Planning appropriate works.
• Estimating labour demand
• Designing Works appropriate in terms of seasonality of labour, and the
time of the year.
• Workers’ participation in planning and social audits
• Need to integrate planning abilities and appropriate technologies with
the planning process prescribed in the Act.
• Strengthening convergence process for leveraging NREGA for
sustainable development: natural resources, productivity, human
development,( health, education) risk cover( life, health), skill set
 Way Ahead
• Administrative Strengthening
• GP: a mini-secretariat, with a strong contingent of staff trained in the
tasks to be performed
• Physical infrastructure including ICT enabling
• Professional support at each level to increase
• Improved quality of training
• Fund Management: difficulty in
• estimation of employment required
• Limited capacity to generate employment restricts capturing full
demand and generating full hundred days/maximum need of work
• Circumstantial exigencies
• Labour season crosses over two fiscal years
• National Employment Guarantee Fund (NEGF). This could be an
opportunity for creating a new institutional mechanism for holding fund
and fund release
• Creating more inclusive fora for community participation
• MGNREGA has stimulated first ever serious debate on social audit
that holds potential for further reform
• However, space within law to be created to allow wide public
participation
 Leveraging NREGA for Sustainable
Development through Convergence

• From mere wage employment to sustainable rural

livelihoods
• From unskilled to skilled labour through knowledge &
technology input, training & capacity building in
productivity increases, water-use efficiency,
backward–forward linkages
• NREGA as Platform for rural development
innovations
 Dialogic process of policy making
A Balancing Act
Law gives space to multiple actors often in conflict. These conflicts
are legitimate assertions of different interpretations of the Act
• The Central Employment Guarantee Council is an institutional
mechanism for such a dialogue among different

• Working groups headed by Council members, with representatives

from civil society, professional institutions, State Governments to
discuss and recommend reform on various policy and operational
aspects of the Act.

• (i) Planning and work execution (ii) Transparency and accountability

(iii) wages (iv) Need of special groups and equity (v) works on
individual land and convergence (vi) capacity building.

• Testimony to the creative, self reflexive dynamic nature of

MGNREGA.
 Significant lessons that emerge from
MGNREGA
• A framework of Rights- based Law is effective
because
a law belongs to people and not to Government.
Government is itself subordinate to law. Normal
hierarchical relationship between Government as
provider and public as recipient get displaced
• Laws should be seen as opportunities for making
administrative systems strong and accountable
• Decentralization, facilitates direct accountability for
outcomes of decisions Also widens stakeholder
participation
• Necessary to delineate structural integration of
different institutions, with a unitary point of overall
power and accountability to take over riding decisions
to enforce the law
 Significant lessons that emerge
from MGNREGA
• Assured budget commitments are important for
implementing schemes to ensure Rights. However, just
a large budget commitment is not enough. Design and
procedure of fund transfer is critical and how this seeks
to manage a balance between efficiency with
accountability, financial support with discipline, local
freedom with central regulation.
• Legal frameworks should permit operational flexibility.
Procedural matters should not be confused with rights
or with the substantive content of law. Procedures
should be flexible; end-goals non- negotiable.
• The osmotic process of local innovation and policy and
law is a unique feature of MGNREGA. It enables the
normative framework to be both regulatory and
responsive to the dynamic changing situation on the
ground,
 Significant lessons that emerge from
MGNREGA
• Strong and independent grievance redressal mechanisms are to
be integral to the design. The issue is what ought to be their
nature? Administrative bodies with powers to decide and direct but
not really to coerce, and so really exercising a moral force? Or
should they be judicial with powers of a court to summon, award
judgments and punish?
• Social Audit, RTI and ICT as vehicles for transparency and public
accountability
• Development laws should allow a collaborative policy making
through space to multiple stakeholders and corresponding
procedural flexibility.
• Conflict becomes the means of forcing issues and co-creating
change. This can hold the potential of transforming governance
• A law guaranteeing rights should be grounded firmly on the basis
of the concept of equality. This makes the quality of opportunity
offered a significant issue.
• Need to rationalise programmes for integrating strategies and
resources into Rights based laws