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The National Rural Employment Guarantee Act

The National Rural Employment Guarantee Act (NREGA, also known as National Rural Employment Guarantee Scheme, NREGS) is Indian legislation enacted on August 25, 2005. The NREGA 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.

This act was introduced with an aim of improving the purchasing power of the rural people, primarily semi or un-skilled work to people living below poverty line in rural India. It attempts to bridge the gap between the rich and poor in the country. Roughly one-third of the stipulated work force must be women.

Political background

The act was brought about by the UPA coalition government under the pressure from left parties. The promise of this project was one of the major factors that gained UPA victory in the Indian general election, 2004.

Dr. Jean Dr├Ęze, a Belgian born economist, at the Delhi School of Economics, has been a major influence on this project.

The plan

Central Government shall meet the cost towards the payment of wage, 3/4 of material cost and certain percentage of administrative cost. State Government shall meet the cost towards unemployed allowance, 1/4 of material cost and administrative cost of State council.

Adult members of rural households submit their name, age and address with photo to the Gram Panchayat. The Gram panchayat registers households after making enquiry and issues a job card. The job card contains the details of adult member enrolled and his /her photo. Registered person can submit an application for work in writing (for at least fourteen days of continuous work) either to panchayat or to Programme Officer.

The panchayat/programme officer will accept the valid application and issue dated receipt of application, letter providing work will be sent to the applicant and also displayed at panchayat office. The employment will be provided within a radius of 5 km: if it is above 5 km extra wage will be paid.

If employment under the scheme is not provided within fifteen days of receipt of the application daily unemployment allowance will be paid to the applicant.

The scheme starting from February 2, 2006 in 200 districts (out of a total of 593 in the country) will cover all districts in five years. The government announced the addition of another 130 districts in the financial year 2007-8. (See External Links below for a full list of districts covered by the NREGA.)


For financial year 2006-2007 budgetary support for NREGA is Rs 11300 crores.

The Congress-led UPA government decided to further extend this scheme across the country at the beginning of the financial year 2008-09, the year the government faces a new general elections. Though the government has already planned to extend the scheme, country's supreme audit institution, the Comptroller and Auditor General (CAG) of India, in its performance audit of the implementation of NREGA found out "significant deficiencies" and had even advised the government to plug these shortcomings before extending the scheme further


In April 2008 NREGA expanded to cover the entire India.

IT implementation

NREGA is the first programme having been implemented with full IT support. TATA Consultancy Services, India's largest IT/ITES sector company has designed the software solution for the state of Andhra Pradesh. NIC, a government of India undertaking, developed solution has been implemented in other areas.


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