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Social Audit of MGNREGA Scheme


The Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA), a fundamental component of India’s social welfare initiatives, has been marred by persistent concerns regarding a high incidence of corruption. Although the program incorporates mechanisms, such as social audit units, recent statistics reveal disappointing outcomes in terms of fund recovery and overall effectiveness.


GS II: Government Policies and Interventions

Dimensions of the Article:

  1. Recent Statistics on MGNREGA and the Social Audit Mechanism
  2. Social Audit Mechanism under MGNREGA
  3. Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA)

Recent Statistics on MGNREGA and the Social Audit Mechanism

Financial Year 2023-24:

  • In the ongoing financial year (2023-24), social audit units identified misappropriation amounting to ₹27.5 crore under the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA).
  • After corrective actions were taken, this amount was reduced to ₹9.5 crore, but only a minimal ₹1.31 crore (13.8% of the total) has been recovered.

Previous Financial Years:

  • Recovery rates in previous financial years exhibit a similar trend of inefficiency:
    • In 2022-23, the recoverable amount was ₹86.2 crore, but only ₹18 crore (20.8% of the total) was recovered.
    • In 2021-22, ₹171 crore was flagged, yet a mere ₹26 crore (15% of the total) was recovered.
  • Consistently low recovery rates raise significant concerns about the effectiveness of the MGNREGA scheme in combatting corruption.
  • The low recovery rate also poses a threat to the credibility of the entire social audit process, potentially undermining public trust in MGNREGA’s integrity and purpose.

About Social Audit:

  • Social audit is the examination and assessment of a program or scheme conducted with the active involvement of people, comparing official records with ground realities.
  • It serves as a powerful tool for social transformation, community participation, and government accountability.
  • Unlike financial audits that scrutinize financial records, social audits focus on evaluating a program’s effectiveness in achieving its social goals while involving stakeholders.
Social Audit Mechanism under MGNREGA:


  • Section 17 of the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) mandates social audits for all works executed under the program.
  • The Audit of Scheme Rules, 2011, outlines the procedures for social audits and the responsibilities of various entities, including the Social Audit Unit (SAU), state government, and MGNREGA field workers.
Related Issues and Challenges:

Funding Shortages:

  • Social audit units often grapple with inadequate funding, hindering their effectiveness.
  • While the Union government provides funds to these units to ensure their independence from states, issues with timely fund allocation have left some units without funds for extended periods.

Lack of Training:

  • Inadequate training and resources further hinder the effectiveness of social audit units in identifying malpractice.
  • Personnel Shortage:
  • Insufficient staffing makes it difficult for social audit units to carry out their duties effectively.

Low Recovery Rate:

  • Some states have consistently reported “zero cases” and “zero recoveries” over the last three years, raising questions about the effectiveness of monitoring in these regions.
  • Even states with active social audit units, like Telangana, struggle with low recovery rates, indicating systemic challenges.

Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA)

  • Mahatma Gandhi National Rural Employment Guarantee Act, MGNREGA, is an Indian labour law and social security measure that aims to guarantee the ‘right to work’. This act was passed in September 2005.
  • It aims to enhance livelihood security in rural areas by providing at least 100 days of wage employment in a financial year to every household whose adult members volunteer to do unskilled manual work.
  • It covers all districts of India except the ones with 100% urban population.
  • MGNREGA is to be implemented mainly by gram panchayats (GPs). The involvement of contractors is banned.
  • Apart from providing economic security and creating rural assets, NREGA can help in protecting the environment, empowering rural women, reducing rural-urban migration and fostering social equity, among others.
  • The MGNREGA wage rates are fixed according to changes in the CPI-AL (Consumer Price Index-Agriculture Labour), which reflects the increase in the inflation in rural areas.

How MGNREGA came to be?

  • In 1991, the P.V Narashima Rao government proposed a pilot scheme for generating employment in rural areas with the following goals:
    • Employment Generation for agricultural labour during the lean season.
    • Infrastructure Development
    • Enhanced Food Security
  • This scheme was called the Employment Assurance Scheme which later evolved into the MGNREGA after the merger with the Food for Work Programme in the early 2000s.
Features of MGNREGA
  • It gives a significant amount of control to the Gram Panchayats for managing public works, strengthening Panchayati Raj Institutions.
  • Gram Sabhas are free to accept or reject recommendations from Intermediate and District Panchayats.
  • It incorporates accountability in its operational guidelines and ensures compliance and transparency at all levels.
Objectives of MGNREGA
  • Provide 100 days of guaranteed wage employment to rural unskilled labour
  • Increase economic security
  • Decrease migration of labour from rural to urban areas.

-Source: Indian Express


December 2023