Nrega Some Facts

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Performance Audit Report No. XXXX11 of 2008

Ministry of PowerRural Development

Performance Audit of Implementation of National Rural

Employment Guarantee Act (NREGA)

1 Introduction

1.1 Overview of NREGA

The National Rural Employment Guarantee Act, 2005 (NREGA) guarantees 100 days of employment in a financial year to any rural household whose adult members are willing to do unskilled manual work. The Act initially came into force in 200 districts with effect from 2 February 20061. The basic objective of the Act is to enhance livelihood security in rural areas by providing at least 100 days of guaranteed wage employment on demand. This work guarantee can also serve other objectives: generating productive assets, protecting the environment, empowering rural women, reducing rural-urban migration and fostering social equity, among others.

The Act requires every State to formulate a State Rural Employment Guarantee Scheme (REGS), which should conform to the minimum features specified under the Act. According to the Act, rural households have a right to register themselves with the local Gram Panchayats (GPs), and seek employment. Work is to be provided within 15 days from the date of demand, failing which the State Government will have to pay unemployment allowance at the stipulated rates.

The State Rural Employment Guarantee Schemes are implemented as Centrally Sponsored Schemes on a cost sharing basis between the Centre and the States. The Central Government will bear all costs, other than the following:

25 per cent of the cost of material and wages for semi-skilled/ skilled workers;

Unemployment allowance; and

Administrative expenses of the State Employment Guarantee Council.

Detailed Operational Guidelines have been issued by the Ministry of Rural Development (Ministry), Government of India. Together with the provisions of the Act, they prescribe:

the types of works that can be covered under NREGA (subject to additions in respect of different States);

the minimum entitlements of labour;

1 An additional 130 districts were notified under Phase-II with effect from 15 May 2007during 2007 -08, and the remaining 266 districts have been notified under Phase-III with effect from 1 April 2008. These additional districts are not being covered as part of this Performance Audit.

March 2008Performance Audit of Implementation of NREGA (Pre-Bond Copy)Page 11 Performance Audit Report No. 11 of 2008

the roles and responsibilities of different functionaries right from the State Government to the District, Block and Panchayat level functionaries, including those of the Panchayati Raj Institutions (PRIs) at various levels;

the detailed procedures for planning, financial management, registration and employment allotment, execution of works, and payment of wages and unemployment allowance;

the detailed records to be maintained at different levels; and

the mechanisms for social audit, as well as monitoring and evaluation of outcomes.

1.2 Organisational Structure and Funding Pattern

The organizational structure for implementation of NREGA is as follows:

ORGANISATIONAL STRUCTURE OF NREGA

Central Employment

Guarantee Council (CEGC)
Advise GoI on NREGA-related matters

Monitoring and Evaluation
Prepare Annual Reports

State Employment Guarantee

Council (SEGC)

Advise State Government on implementation
Monitoring and Evaluation
Decide on ‘preferred works’ under REGS
Prepare Annual Reports

Ministry of Rural Development (MORD)

Nodal Ministry for NREGA implementation

Resource support to States
Review, monitoring and evaluation of processes and outcomes Establish MIS

State Government

Formulate Rural Employment Guarantee Scheme (REGS) and Rules

Designate State Rural Employment Guarantee Commissioner

Ensure timely release of State Share

Ensure wide dissemination of information

Ensure administrative, financial...
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