Analysis of the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS)

The Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) is assessed based on its effectiveness and the enthusiasm shown by the government in its implementation.

Significance and Historical Context

• The scheme is nearing its 20-year milestone, indicating its utility and popularity among rural populations.
• Although initially met with reluctance by the National Democratic Alliance, it proved indispensable during the COVID-19 pandemic.

Current Challenges

• Perception as an "unwanted necessity" post-pandemic, evidenced by reduced Budget allocations from 3.2% in FY21 to 1.78% in FY25 (BE).
• No extra allocation despite being a demand-driven scheme, leading to wage delays and artificially suppressed demand. 

Implementation Issues

• Need to adjust wages in line with inflation.
• Problems with the job cards' seeding with the Aadhaar-based payment system.

Benefits of MGNREGS 

• Support for the destitute.
• Creation of village assets (irrigation canals, rural roads, water conservation facilities).
• Boosts rural economy by providing disposable income to village poor.

Recommendations for Policy Change

Increasing the scheme's budget allocation to meet actual demand is proposed as a positive step forward.