MGNREGS has the potential to increase wages of casual labour if implemented at its full capacity. Under Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA), at least 100 days of guaranteed wage employment in a fiscal is provided to any rural household whose adult members volunteer to do unskilled manual work on demand.
The scheme was ranked as the world's largest public works programme by the World Bank in 2015. The scheme provides a social security net for 15 per cent of our country's population.However, while the scheme aims at providing 100 days of guaranteed employment, on an average, at an all-India level below 50 days of employment was actually provided in FY 18. None of the states were able to provide full 100 days employment as mentioned in the scheme as per extracts from latest RBI annual report.
The average days of employment provided under MGNREGS was a mere 45.2. Tripura was leading the pack with close to 75 days of employment. While Manipur provided only 20 days of employment.
As cited by RBI, the scheme has a huge potential and can even propel daily wages, if implemented at full capacity by reducing the availability of casual workforce. In total, workforce of 25.4 crore workers is available.
As per the official numbers available on the MGNREGA website, in FY18 average days of employment provided per household was 45.77 which was only 46 in FY17 and 40.17 days in FY15.The average wage rate per person in FY18 was Rs 169.46, in FY17 it was Rs 161.65 and in FY15 wage rate was only Rs 143.92.
The primary objective of MGNREGA was to enhance livelihood security in rural areas along with creating of durable assets such as building roads and canals. Employment had to be provided within 5 km of an applicant's residence, and minimum wages had to be paid. If employment is not provided within 15 days of application, applicants are entitled to an unemployment allowance. This unemployment allowance had to be paid by state governments.