The National Rural Employment Guarantee Act, (NREGA) was notified on September 7, 2005.The objective of the Act is to enhance livelihood security in rural areas by providing at least 100 days of guaranteed wage employment in a financial year to every household whose adult members volunteer to do unskilled manual work.


a. Strong social safety net for the vulnerable groups by providing a fall-back employment source, when other employment alternatives are scarce or inadequate

b. Growth engine for sustainable development of an agricultural economy. Through the process of providing employment on works that address causes of chronic poverty such as drought, deforestation and soil erosion, the Act seeks to strengthen the natural resource base of rural livelihood and create durable assets in rural areas. Effectively implemented, NREGA has the potential to transform the geography of poverty

c. Empowerment of rural poor through the processes of a rights-based Law

d. New ways of doing business, as a model of governance reform anchored on the principles of transparency and grass root democracy


Thus, NREGA fosters conditions for inclusive growth ranging from basic wage security and recharging rural economy to a transformative empowerment process of democracy

The Act was notified in 200 districts in the first phase with effect from February 2nd 2006 and then extended to additional 130 districts in the financial year 2007-2008 (113 districts were notified with effect from April 1st 2007, and 17 districts in UP were notified with effect from May 15th 2007). The remaining districts have been notified under the NREGA with effect from April 1, 2008. Thus NREGA covers the entire country with the exception of districts that have a hundred percent urban population.


i) Adult members of a rural household, willing to do unskilled manual work, may apply for registration in writing or orally to the local Gram Panchayat

ii) The Gram Panchayat after due verification will issue a Job Card. The Job Card will bear the photograph of all adult members of the household willing to work under NREGA and is free of cost.

iii) The Job Card should be issued within 15 days of application.

iv)  A Job Card holder may submit a written application for employment to the Gram Panchayat, stating the time and duration for which work is sought. The minimum days of employment have to be at least fourteen.

v) The Gram Panchayat will issue a dated receipt of the written application for employment, against which the guarantee of providing employment within 15 days operates.

vi)  Employment will be given within 15 days of application for work, if it is not then daily unemployment allowance as per the Act, has to be paid liability of payment of unemployment allowance is of the States.

vii) Work should ordinarily be provided within 5 km radius of the village. In case work is provided beyond 5 km, extra wages of 10% are payable to meet additional transportation and living expenses.

viii) Wages are to be paid according to the Minimum Wages Act 1948 for agricultural laborers in the State, unless the Centre notifies a wage rate which will not be less than Rs. 60/ per day. Equal wages will be provided to both men and women.

ix) Wages are to be paid according to piece rate or daily rate. Disbursement of wages has to be done on weekly basis and not beyond a fortnight in any case.

x) At least one-third beneficiaries shall be women who have registered and requested work under the scheme.

xi) Work site facilities such as crèche, drinking water, shade have to be provided.

xii) The shelf of projects for a village will be recommended by the gram sabha and approved by the zilla panchayat.

xiii) At least 50% of works will be allotted to Gram Panchayats for execution.

xiv) Permissible works predominantly include water and soil conservation, forestation and land development works.

xv) A 60:40 wage and material ratio has to be maintained. No contractors and machinery is allowed.

 xvi) The Central Government bears the 100 percent wage cost of unskilled manual labor and 75 percent of the material cost including the wages of skilled and semi skilled workers

xvii) Social Audit has to be done by the Gram Sabha

xviii) Grievance redressal mechanisms have to be put in place for ensuring a responsive implementation process.

xix) All accounts and records relating to the Scheme should be available for public scrutiny.


NREGA marks a paradigm shift from all precedent wage employment programmes. The significant aspects of this paradigm shift are captured below:

i) NREGA provides a statutory guarantee of wage employment.

ii) It provides a rights-based framework for wage employment. Employment is dependent upon the worker exercising the choice to apply for registration, obtain a Job Card, and seek employment for the time and duration that the worker wants.

iii) There is a 15 day time limit for fulfilling the legal guarantee of providing employment.

iv) The legal mandate of providing employment in a time bound manner is underpinned by the provision of Unemployment Allowance.

v) The Act is designed to offer an incentive structure to the States for providing employment as ninety percent of the cost for employment provided is borne by the Centre. There is a concomitant disincentive for not providing employment as the States then bear the double indemnity of unemployment and the cost of unemployment allowance.

vi) Unlike the earlier wage employment programmes that were allocation based. NREGA is demand driven. Resource transfer under NREGA is based on the demand for employment and this provides another critical incentive to States to leverage the Act to meet the employment needs of the poor.

vii) NREGA has extensive inbuilt transparency safeguards

a. Documents: Job Cards recording entitlements (in the custody of workers) written application for employment, Muster Rolls, Measurement Books and Asset Registers

b. Processes: Acceptance of employment application, issue of dated receipts,

time bound work allocation and wage payment, Citizen Information Boards at

worksites, Vigilance Monitoring Committees, regular block, district and state level

inspections and social audits

 viii) The public delivery system has been made accountable, as it envisages an Annual Report on the outcomes of NREGA to be presented by the Central Government to the Parliament and to the Legislature by the State Government. Specifically personnel responsible for implementing the Act have been made legally responsible for delivering the guarantee under the Act.


Under Section 4 of the Act the Scheme to be formulated by the State Government will conform to the legally non-negotiable parameters laid down in Schedules I and II of the Act. In addition, the Schemes will conform to the operational parameters delineated in the Guidelines.

The Scheme so formulated will be called the National Rural Employment Guarantee Scheme (NREGS), followed by the name of the State. The National level name and logo is mandatory. This logo will be used for all IEC materials and activities.

The Scheme will be implemented as a Centrally Sponsored Scheme on a cost-sharing basis between the Centre and the States as determined by the Act. Annexure A1 lists all the essential features that the Rural Employment Guarantee Scheme should cover.