The Impact of the Mahatma Gandhi National Rural Employment Guarantee Act (Mnrega) in Rural India?

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The Mahatma Gandhi National Rural Employment Guarantee Act aims at enhancing the livelihood security of people in rural areas by guaranteeing hundred days of wage-employment in a financial year to a rural household whose adult members volunteer to do unskilled manual work. The National Rural Employment Guarantee Act (NREGA) was renamed after the Father of Nation Mahatma Gandhi as Mahatma Gandhi National Rural Employment Guarantee Act (MNREGA) on 2nd October 2009, commemorating Golden Jubilee of Panchayati Raj in India. It was on 2nd October, 1959 that Pt. Jawaharlal Nehru, the first Prime Minister of India had laid the foundations of Panchayati Raj at Naguar in Rajasthan. The National Rural Employment Guarantee Act was enacted by legislation on August 25, 2005 and came into effect on February 2, 2006. It was introduced with an aim of improving the purchasing power of the rural people, primarily by providing semi or un-skilled work to people living in rural India, whether or not they are below the poverty line. The Act was brought about by the UP A coalition government supported by the left parties, in accordance with the promise the UPA had made before the 2004 general elections. Dr. Jean Dreze, a Belgian born economist, at the Delhi School of Economics, has been a major influence on this project. In 2009-10, the Central Government outlay for scheme was ? 39,100 crore. The Act directs state governments to implement MNREGA schemes. Under the NREGA, the Central Government meets the cost towards the payment of wage, three-fourths of material cost and some percentage of administrative cost. State governments meet the cost of unemployment allowance, one-fourth of material cost and administrative cost of State council. Since the State governments pay the unemployment allowance, the Act is a heavy incentive for them to offer employment to workers. However, it is up to the State Government to decide the amount of unemployment allowance, subject to the stipulation that it...
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