NREGA vs MGNREGA: Objective, Impact on Poverty, Unemployment, and Rural Development in India

India’s rural employment guarantee schemes have played a crucial role in addressing poverty, unemployment, and rural development. In this article, we will conduct a comprehensive comparative analysis of two prominent initiatives, the National Rural Employment Guarantee Act (NREGA) and the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA). Let’s delve into their objectives, key features, impact on rural India, and address the challenges they face.


The NREGA, enacted in 2005, aimed to provide a legal guarantee for at least 100 days of employment in a financial year to every rural household willing to do unskilled manual work. The primary objective was to enhance the livelihood security of rural workers and promote sustainable development by creating durable assets in rural areas.

MGNREGA, introduced in 2006, extended the employment guarantee to 150 days per household. It aimed to alleviate rural poverty, reduce distress migration, empower women, and promote social inclusion by providing job opportunities and strengthening the livelihoods of the rural poor.

Coverage and Implementation

NREGA initially covered 200 districts in India and gradually expanded nationwide. It operates under the Ministry of Rural Development and involves a three-tier implementation structure comprising the central government, state governments, and local self-governance bodies. The central government provides funding, while the state governments manage the scheme’s implementation.

MGNREGA covers all rural districts in India. It follows a similar implementation structure but places greater emphasis on the role of local self-governance institutions, such as gram panchayats, in the planning, execution, and monitoring of works. This approach ensures community participation and transparency in decision-making processes.

Key Features

  1. Employment Generation: Both NREGA and MGNREGA aim to provide employment opportunities to rural households. Workers engage in various works, including the construction of rural infrastructure, water conservation, and land development activities. The schemes emphasize labor-intensive activities to maximize job creation and boost local economies.
  2. Wage Payments: NREGA and MGNREGA mandate timely payment of wages to workers. NREGA uses the “material-cum-wage” ratio, where wages and material costs are roughly divided into a 60:40 ratio. MGNREGA ensures that at least one-third of the total workers are women and guarantees equal wages for men and women, promoting gender equality and empowering women.
  3. Social Inclusion: Both schemes strive for social inclusion by actively involving marginalized communities, women, and the disabled. NREGA and MGNREGA prioritize the participation of women and provide equal wages, which have contributed to empowering women and reducing gender disparities. These schemes also provide special provisions for the disabled, ensuring their inclusion in rural employment opportunities.

Impact and Challenges

  1. Poverty Alleviation: NREGA and MGNREGA have significantly contributed to poverty reduction by providing rural households with a reliable income source. The schemes have helped improve rural livelihoods, enhance food security, and reduce distress migration. By providing steady employment, they have enabled rural communities to improve their standard of living and break free from the cycle of poverty.
  2. Asset Creation: NREGA and MGNREGA focus on creating durable assets in rural areas, such as irrigation facilities, roads, and check dams. These assets not only boost agricultural productivity but also improve access to markets, healthcare, and education, thereby promoting overall rural development. The schemes have helped bridge the infrastructure gap in rural areas, fostering economic growth and improving quality of life.
  3. Challenges: Despite their successes, NREGA and MGNREGA face several challenges. Delayed wage payments, corruption, and bureaucratic hurdles have been reported in certain areas, leading to dissatisfaction among workers. Additionally, seasonal fluctuations in employment demand and insufficient coverage of skilled work pose challenges to sustaining the impact of these schemes. Continued efforts are required to streamline administrative processes, strengthen monitoring mechanisms, and address these challenges effectively.

In conclusion, NREGA and MGNREGA have been instrumental in providing livelihood opportunities, reducing poverty, and fostering rural development in India. The schemes have made significant strides in employment generation, asset creation, and social inclusion.

However, addressing challenges such as delayed payments, corruption, and skill development gaps will be crucial for maximizing their impact. Regular evaluation, monitoring, and capacity building at the grassroots level will further enhance the effectiveness of NREGA and MGNREGA, ensuring that rural India continues to progress and thrive.

These schemes stand as powerful tools in the fight against poverty and unemployment, playing a vital role in transforming the lives of millions of rural households.


  1. National Rural Employment Guarantee Act (NREGA) of 2005.
  2. Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) of 2006.
  3. Ministry of Rural Development, Government of India. (n.d.). Official website.

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