MGNREGA Scheme Faces Fund Shortage

Prelims level : Government policies and schemes Mains level : GS 2: mechanisms, laws, institutions and Bodies constituted for the protection and betterment of these vulnerable sections.
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  • The Mahatma Gandhi National Rural Employment Guarantee Act scheme is facing a severe fund crunch, with 99% of money allocated already exhausted three months before the end of the financial year, and 11 States and Union Territories having a negative net balance.


  • Studies analysing government data show that the scheme faces difficulties in meeting the demand for work and paying wages on time.
  • It is said that these issues are likely to be exacerbated by the current fund crisis.
  • The problem gets intensified when the demand for MGNREGA employment peaks during non-agricultural season
  • And also, rainfall deficits and drought this year are likely to worsen the situation, could increase the demand and need for work, as witnessed in 2015-16
  • It has been found that employment provided was already 32% lower than work demanded during 2017-18.
  • Hence the fund crisis could further constrain the employment generation under MGNREGA and State governments and field functionaries might be compelled not to register demand for work in order to contain the payment liabilities of the governments, which goes against the spirit of MGNREGA.


  • The Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) is an employment guarantee act. It was introduced in 2005 through the National Rural Employment Guarantee Act, 2005.
  • In 2010, NREGA renamed as MGNREGA
  • It aims to provide guaranteed 100 days of wage employment per year to each rural household, which could in turn help to enhance livelihood security of household in rural areas of India. It provides work to all section of the society and help in social inclusion of women, SC and STs (Minimum one-third of the workers should be women)
  • It is a demand driven scheme
  • The Act currently covers all districts with the exception of those that have a 100% urban population.
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