Opinion MGNREGA gave Indians dignity. New job guarantee scheme keeps its core – but makes some mistakes
That the government has kept this core element in the new rural job guarantee framework and has enhanced the guaranteed days of employment to 125 from 100 is welcome. But, transferring the burden of the scheme's funding to states and pausing employment guarantee during the peak agriculture season are not good ideas
What is actually holding back labourers is not the MGNREGA but their experience of not receiving full wages or timely payment. President Droupadi Murmu has given her assent to the Viksit Bharat-Guarantee for Rozgar and Ajeevika Mission (Gramin) Bill (VB-G RAM G), 2025, which was introduced and passed by both Houses of Parliament last week. It repeals the existing Mahatma Gandhi National Rural Employment Guarantee (MGNREG) Act, 2005 and introduces a new rural job guarantee scheme. An objective assessment of the MGNREGA and a fair analysis of the G RAM G Bill are essential as the move concerns the welfare of 8.61 crore families (or 12.16 crore workers).
MGNREGA was enacted by the UPA government 20 years ago to provide for the “enhancement of livelihood security” for rural families by providing at least 100 days of guaranteed wage employment in every financial year to every household whose adult members volunteer to do unskilled manual work. It has served its purpose well. Since its launch, MGNREGS — the scheme under the MGNREGA law — has generated 4,872.16 crore person-days, with the total expenditure reaching Rs 11,74,692.69 crore till date. The money that flowed to villages boosted rural demand. In the last 10 years, more than 5 crore families availed the programme every year. This figure crossed the 7 crore in F Y2020-21 and FY 2021-21, during Covid-19. It became a safety net for migrants who returned to their villages post the lockdown.
Before MGNREGA, the country saw several rural employment programmes — the Rural Manpower Programme (1960s), Crash Scheme for Rural Employment (1971), Jawahar Rozgar Yojana (1989), Sampoorna Grameen Rozgar Yojana (1999), Employment Assurance Scheme (1993), and Food for Work Programme. At the state level, there were initiatives, backed by a law, like the Maharashtra Employment Guarantee Act, 1977 — the first attempt to provide a job guarantee.
Despite all those efforts, the situation of rural and agricultural labourers remained grim. There were no fixed wages, no fixed work hours, and no timely payment. A labourer working in a zamindar’s field during kharif season (July-October) would wait till Kartik, the eighth month in the Hindu lunar calendar, falling around October-November, to get her remuneration — sometimes in cash but usually in kind (grains). The situation in the rabi season, when the labourers would get their wages at the end of the season in Vaishakha (April-May). Many labourers’ hardship would end up being a begaari (work without remuneration).
MGNREGS may not have created durable assets (as claimed by some), but gave an identity to labourers, through its job cards, almost eliminated Begaari, ensured equal pay for male and female, set the floor of wages for unskilled work, and guaranteed payment of wages on time. Above all, it gave dignity to labourers and empowered them to say “no” to the zamindar and thekedaar.
By bringing the VB-G RAM G Act 2025, the government too recognises the importance of a rights-based approach in the delivery of welfare programmes. That the government has kept this core element in the new rural job guarantee framework and has enhanced the guaranteed days of employment to 125 from 100 is welcome. But, transferring the burden of the scheme’s funding to states and pausing employment guarantee during the peak agriculture season are not good ideas.
The Rural Development Ministry has projected the annual spending on the new scheme to be Rs 1,51,282 crore in the first full year post implementation. It estimates the Centre’s share to be Rs 95,692.31 crore, suggesting that states would have to fund the balance of Rs 55,590 crore. According to the VB G RAM G Act, 11 northeastern and hill states will have to foot only 10 per cent of the scheme’s expenditure, and the scheme will be fully funded by the Centre in the remaining four Union Territories. Thus, as many as 19 big states will have to share 40 per cent of the scheme’s financial burden. In 2024-25, the total expenditure under the scheme was Rs 1.04 lakh crore. Wages (entirely paid for by the Centre) accounted for Rs 73,337 crore, and the material cost (shared by the Centre and states) was Rs 25,987 crore. While there is no official estimate about the expected fiscal burden on states due to the new scheme, a calculation based on the 2024-25 spending shows that the additional fiscal impact on states (excluding West Bengal) may be about Rs 30,000 crore annually. Thus, the idea of sharing spending with states may be fiscally prudent for the Centre, but it is certainly not the case for the states, already facing fiscal challenges.
To ensure the availability of labour for agriculture, the new Act proposes that guaranteed employment would not be available to rural households for 60 days during peak agricultural seasons. In the past, states have flagged non-availability of labour during peak farm seasons, but the MGNREGS employment pattern shows that the demand for work usually peaks in the month of June. During three months–September to November–which see harvesting of kharif crops and sowing of rabi crops, the MGNREGS demand usually remains low. This shows that the proposed 60-day pause in employment guarantee may not be a good move to attract labourers to farm work. What is actually holding back labourers is not the MGNREGA but their experience of not receiving full wages or timely payment.
The concept of “normative allocation” also reverses the gains made in the planning process. It rejects the “bottom up” approach of the Labour Budget, which was based on demand, and brings back the “top down” approach in resource allocation.
The writer is senior assistant editor, ‘The Indian Express’. harikishan.sharma@expressindia.com
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