Print Friendly, PDF & Email

Govt. forms panel to look into MGNREGA’s efficacy

GS Paper 2

Syllabus: Welfare schemes for vulnerable sections of the population by the Centre and States and the performance of these schemes


Source: TH

 Direction: There have been demands from several quarters in India to scrap the MGNREGA. The article emphasises that, while the scheme has flaws, it is not useless. This is why the government has established a committee to reform the scheme.


Context: The Central government has constituted a committee to review the implementation of the MGNREGA scheme, especially to assess the programme’s efficacy as a poverty alleviation tool.



  • The Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) was enacted in 2005, and the demand-driven scheme promises 100 days of unskilled work per year to every rural household that wishes to participate.
  • It was launched as a poverty alleviation instrument for the rural region, providing them with a safety net in the form of guaranteed work and wages. The scheme now has 51 crore active workers enrolled.
  • However, it was felt that states like UP and Bihar where there is a higher level of poverty, haven’t been able to utilise the scheme optimally.
  • The scheme has also been criticised by economists like Jagdish Bhagwati and Arvind Panagariya as an “inefficient instrument of shifting income to the poor”.


About the committee:

  • The Sinha committee (named after former Rural Development secretary Amarjeet Sinha) has now been tasked to study –
    • The various factors behind the demand for MGNREGA work,
    • The expenditure trends and inter-State variations, and
    • The composition of work.
  • It will suggest (within 3 months) what changes in focus and governance structures are required to make MGNREGA more effective.


Terms of reference of the committee:

  • It will look at the argument that the cost of providing work has also shot up since the scheme first started.
  • It will review the reasons and recommend ways to bring in a greater focus on poorer areas.
  • It will study if the composition of work taken up presently under the scheme should be changed, i.e., whether it should focus more on community-based assets or individual works.


Criticism of the scheme:

  • Lack of tangible asset creation: Bihar, for example, despite its levels of poverty, does not generate assets to make a concrete difference, while Kerala which is economically better has been utilising it for asset creation.
  • Allocation of funds is not as per the needs of the states: From the above example, while Bihar needs MGNREGA more, Kerala cannot be denied funds because of the current structure of the programme.


Conclusion: Regardless of all the criticism, MGNREGA acted as a crucial safety net during the COVID pandemic. Thus, the scheme needs to be reformed to provide not only social (safety net for the vulnerable) but also economic (tangible asset creation) benefits.


Insta Links:



Mains Links:

Q. Discuss the key features and significance of MGNREGA. What are the recent concerns regarding the implementation of the scheme? (15M)