National Rural Employment Guarantee Act (NREGA) Passed by Lok Sabha - [August 23, 2004] This Day in History

23 August 2004

NREGA passed by the Lok Sabha.

What happened?

The Lok Sabha passed the National Rural Employment Guarantee Act (NREGA) which guarantees a minimum of 100 days of paid work for rural households. The Rajya Sabha passed it on 25 August 2005 and the bill got presidential assent on 5 September 2005. Government schemes are important for the IAS exam.


  • NREGA is touted as the largest social security scheme in the world.
  • This act ensures the right to employment to rural households.
  • As per the act, every rural household is assured at least 100 days of work in a year. Minimum wage is guaranteed for the work.
  • The work includes unskilled manual labour and covers projects like building roads, canals, ponds, wells, irrigation work, water harvesting, afforestation, flood control, land development, rural connectivity and other government-notified work.
  • The household should apply for a job card to the Gram Panchayat. The work can be shared amongst adults of the same household.
  • The scheme’s implementation is the responsibility of the Panchayats.
  • On application of the job, employment must be given within 15 days. The work must fall within 5km of the applicant’s residence. If he/she is not provided work within 15 days, he/she would get an unemployment allowance.
  • The scheme is legally binding on the government.
  • The right to work is enshrined in the Constitution in the Directive Principles of State Policy in Article 41. The act also aims to follow Article 21 of the Constitution which grants the right to life with dignity to all citizens.
  • The act bans contractors from being a part of the process.
  • Payment is now done chiefly through banks or post office accounts. This has also led to the opening of around 10 crore new bank or PO accounts.
  • The name of the act was changed to Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) in 2009 on Mahatma Gandhi’s birth anniversary.
  • Dr Jean Dreze, a Belgian-Indian economist was a major influence on the creation of the NREGA.
  • The 2017 Union Budget allocated Rs.48000 crore for the scheme.
  • In 2016-17 the average wage a person received as per this scheme was Rs.161.


  • The two main objectives of NREGA are rural development and employment.
  • Every fourth person in rural India lives below the poverty line.
  • This scheme can be used by the poor to come out of poverty and by the marginally better off to have some additional income, especially during lean agricultural seasons.
  • This scheme guarantees employment to all irrespective of gender. There is a good participation of women and SC/ST communities.
  • This has also led to many in the rural areas opening bank or post office accounts.
  • The scheme had also helped many households escape from the moneylender’s noose.
  • The three provisions with respect to women in the scheme are:
  1. 1/3rd of all the work is reserved for women.
  2. Men and women are paid equal wages.
  3. The act provides for childcare facilities at the work site.

NREGA Criticisms

  • There are allegations of corruption in the implementation of the scheme.
  • An audit by the CAG pointed out lapses in the scheme’s working.
  • The lapses include incompletion of work, poor planning by the Panchayats, and lack of awareness about the scheme.
  • The slow pace of the work is also a serious flaw.
  • Many workers don’t get paid or get paid substandard wages because of middlemen siphoning off a lot of the funds. It is also said that people have received wages for work they never did.
  • Some farmers blame the NREGA for making agriculture less profitable. They claim that this scheme takes away people from agricultural labour.
Also on this day 

1942: Freedom fighter Gorabai Katiya was shot dead by the police for participating in a procession for the freedom movement in Narsihapur, Maharashtra. 1947: Sardar Vallabhbhai Patel sworn in as India’s Deputy Prime Minister. 1994: Padma Shri awardee and the first Asian woman to swim across the English Channel Arati Saha dies in Kolkata aged 53. 2000: Union Power Minister R Kumaramangalam dies of cancer in Delhi aged 48.

See previous ‘This Day in History’ here.

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