MGNREGA – National Importance, Potential and Challenges

The Importance of MGNREGA

new mgnrega logo The last twenty years in India have been characterized by India’s growth story. In the era of market reforms, India’s GDP growth has accelerated and during the last two decades the rate of GDP growth has consistently been above 5% (Nagaraj [ed]). India is the 12th largest economy in the world in terms of GDP and is one of the fastest growing economies in the world today (World Bank). The other major theme of this period has been the passage of the Constitution 73rd Amendment by the Indian Partliament in 1992, followed by its extension to scheduled areas in 1996, which has been heralded as the largest decentralization project in the world. The vision informing this decentralization project is that an elected 3-tier local government structure, collectively known as Panchayat Raj Institutions (PRI), will take the lead in ensuring inclusion and empowerment (providing the “missing link between accelerated growth and inclusive growth” MoPR, 2008) in an era of high growth. This systemic move towards decentralization has paved the way for a host of people-centred legislations such as the MGNREGA, the Forest Rights Act and the upcoming National Food Security Act.

Growth with Inclusion?

Yet the experience of the past decade and more has shown that inclusion remains elusive:

  • Growth has remained confined to enclaves of prosperity surrounded by vast hinterlands of deprivation, home to 77 % of India’s population or over 836 million people, with a per capita consumption expenditure of less than or equal to Rs.20 per day (roughly $2 in PPP terms) (NCEUS, 2007; Sengupta,, 2008).
  • The latest National Family Health Survey-3 of 2005-06 shows that the share of anaemic under-3 children has risen to 79% over the previous (NFHS-2) survey of 1998-99, when it was 74%.
  • Nearly half of India’s under-3 year children continue to remain underweight.
  • India has the highest percentage (87%) of pregnant anaemic women in the world (World Bank, 2007)
  • Moreover, as per the World Bank’s World Development Indicators of 2005 and 2007, India’s infant mortality and under-5 mortality rates (63 per 1000 and 87 per 1000 respectively) are not only amongst the highest in the world but are also substantially higher than that of Bangladesh (46 per 1000 and 69 per 1000 respectively), which has a substantially lower per capita gross national income
  • There is also glaring evidence of inter-regional inequalities in these indicators. Thus for instance, states within India are in the same bracket as some of the poorer parts of the world in terms of infant mortality and under-5 mortality and malnourishment.
  • There is also reason to believe that inequities in social sector provisioning such as health, both spatial and inter-group, have persisted, and have probably worsened (Shankar and Shah, 2009).
  • 55% of India’s population between 2000 and 2008 were found to be in Multi-dimensional poverty, according to the UNDP’s Multidimensional Poverty Index in its Human Development Report (UNDP 2010). The report states that there are 421 million poor people in eight Indian states (Bihar, Chhattisgarh, Jharkhand, Madhya Pradesh, Orissa, Rajasthan, Uttar Pradesh, and West Bengal), which is more than the number of poor people (410 million) in the 26 poorest African countries combined.
  • Of these, Orissa, Madhya Pradesh and Jharkhand states have infant and child mortality rates comparable to that of sub-Saharan African countries. There is also evidence that shows that while enrolment for primary schooling has increased in Igendia after campaigns like the Sarva Shiksha Abhiyan, the drop-out rates continue to remain high and quality of education has not improved at all.
U-5 Mortality Rate

Source: 1. World Bank: World Development Indicators, 2013;
2. National Rural Health Mission, Govt. of India,