2. The Mahatma Gandhi National Rural Employment
Guarantee Act (MGNREGA) is an Indian job guarantee
scheme, enacted by legislation on August 25, 2005.

3. The scheme provides a legal guarantee for one hundred
days of employment in every financial year to adult members
of any rural household willing to do public work-related
unskilled manual work at the statutory minimum wage of
Rs 120 (US$2.64) per day in 2009 prices.

4. The Central government outlay for scheme is 40,000 crore
(US$8.8 billion) in FY 2010–11.
The law was initially called the National Rural Employment
Guarantee Act (NREGA) but was renamed on 2 October
2009.

5. The Plan

6. Under the MGNREGA the Central Government meets the
cost towards the payment of wage, 3/4 of material cost and
some percentage of administrative cost.

7. State Governments meet the cost of unemployment
allowance, 1/4 of material cost and administrative cost of
State council.

8. Since the State Governments pay the unemployment
allowance, they are heavily incentivized to offer employment
to workers.

9. However, it is up to the State Government to decide the
amount of unemployment allowance, subject to the stipulation
that it not be less than 1/4 the minimum wage for the first 30
days, and not less than 1/2 the minimum wage thereafter.

10. 100 days of employment (or unemployment allowance) per
household must be provided to able and willing workers every
financial year.

11. Funding

12. MGNREGA started with an initial outlay of $2.5bn(Rs11300cr)
in year 2006–07. The funding has considerably been
increased as shown in the table below:

13. Works

14. The MGNREGA achieves twin objectives of rural
development and employment.

15. The MGNREGA stipulates that works must be targeted
towards a set of specific rural development activities such as:
•water conservation and harvesting
•afforestation
•rural connectivity
•flood control
•construction and repair of embankments etc.
•Digging of new tanks/ponds
•percolation tanks
•construction of small check dams etc

17. Source:
•www.nrega.nic.in
•www.en.wikipedia.org
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