Context

• NITI Aayog is currently evaluating the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS).Government has informed Lok Sabha.

About the News

• The Development Monitoring and Evaluation Office (DMEO) under NITI Aayog is currently evaluating the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS).
• This evaluation is crucial for obtaining approval from the Expenditure Finance Committee (EFC) for the scheme’s continuation and budget allocation.
• The Ministry of Rural Development has circulated a proposal seeking an outlay of ₹5.23 lakh crore for MGNREGS till FY 2029–30, aligning with the 16th Finance Commission cycle.
• The Ministry of Finance mandates third-party evaluations for all Central Sector and Centrally Sponsored Schemes for continuation beyond March 31, 2026.

About Expenditure Finance Committee

• EFC, under the Ministry of Finance, appraises the financial viability of government schemes.
• Its approval is a procedural requirement for MGNREGS continuation, even though the scheme is legally backed under the MGNREGA Act.
• The evaluation and EFC approval process is part of the Centre’s larger strategy to assess and rationalize welfare schemes ahead of the next Finance Commission period.

Significance of Evaluation

• Improves Design & Implementation: Process evaluations identify bottlenecks, enabling midcourse corrections for better efficiency.
• Ensures Accountability & Transparency: Independent assessments build public trust in government spending.
• Enables Evidence-Based Decisions: Datadriven insights guide policy reforms, resource allocation, and planning.
• Promotes Learning & Improvement: Lessons from evaluations help replicate success and avoid past mistakes. 
• Tracks and Achieves Outcomes: Evaluations assess impact, guiding adjustments to meet intended objectives

About MGNREGA

• The Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA), 2005, is a legislation that provides a legal guarantee of up to 100 days of unskilled manual work per financial year to adult members of rural households willing to work.
• MGNREGA is to be implemented mainly by gram panchayats (GPs). The involvement of contractors is banned.
• Labour-intensive tasks like creating infrastructure for water harvesting, drought relief, and flood control are preferred.

Features Of MGNREGA

• Guaranteed Wage Employment: Provides 100 days of unskilled manual work annually to rural households.
• Legal Entitlement: Employment is a legal right with provision for unemployment allowance if work isn’t provided within 15 days.
• Gender Equality: Promotes equal wages for men and women; a large proportion of workers are women.
• Universal Coverage : Applicable to all rural households that volunteer for work, promoting inclusive development.
• Decentralized Planning: Empowers Gram Panchayats to plan and implement works. 
• Accountability Mechanisms: Ensures social audits, grievance redressal, and DBT for transparency.

Significance 

• Provides guaranteed employment to rural households, reducing seasonal unemployment and distress migration.
• Ensures minimum wages, improving the financial stability of rural workers.
• MGNREGA promotes gender equality by ensuring equal wages for men and women.
• A significant percentage of beneficiaries are women, leading to greater financial independence.
• Benefits marginalized communities, including Scheduled Castes (SCs), Scheduled Tribes (STs), and other vulnerable groups.

Challenges

• Delayed Wage Payments: Regular delays demotivate workers. 
• Insufficient Funding: Budget constraints lead to reduced workdays and incomplete projects. 
• Corruption & Leakages: Issues like fake job cards and misuse of funds persist. 
• Poor Asset Quality: Some projects fail to create sustainable infrastructure.