Working paper

Addressing the employment challenge: India's MGNREGA

This paper examines, in particular, the effects of the National Rural Employment Guarantee Scheme (NREGS) programme on employment, wages and incomes of the rural poor. It also considers its effect on overall growth of the economy.

In September 2005, India’s parliament enacted a remarkable piece of legislation – the National Rural Employment Guarantee Act (NREGA), later renamed Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA). The Act recognizes employment as an entitlement and defines an obligation for the government – the obligation to provide, in each year, 100 days of wage employment at a stipulated minimum wage to all rural households whose members are seeking or willing to do unskilled manual work. Employment scheme under MGNREGA – we shall henceforth refer to it as MGNREGS – was launched in 200 poorest districts during 2006-07 and extended to another 130 districts during 2007-08. Since 2008-09, MGNREGS has been implemented in all the 600-odd non-urban districts in the country.