Opinion VB-G RAM G marks a breach of contract between the poorest citizen and the republic

Instituted in 2005 and renamed in 2009 to include Gandhi’s name, the MGNREGA was unique in guaranteeing 100 days of wage employment per financial year to rural households willing to do unskilled manual work. In the fiscal year 2024-25, the scheme’s total expenditure reached approximately Rs 1,25,219 crore, albeit with a negative net balance of nearly Rs 30,000 crore owing to delayed clearances and wage/material liabilities. Even so, the programme was responsive to demand, ending the year with a 2.1 per cent increase in work demand and payments.

MGNREGA’s genius lay in its entitlement structure: Demand-driven work that the state was legally bound to provide. The implicit contract was between the poorest citizen and the republic — a pact of economic inclusion backed by law. The shift proposed in VB-G RAM G upends this arrangement by enabling annual normative allocations, effectively capping the states’ ability to meet work demand beyond predetermined budgets.

However, even under the current framework, the scheme was failing to deliver its statutory promise. Government data shows that the average number of workdays provided per household barely reached half the guaranteed 100 days in recent years. This shortfall was a symptom of underfunding and administrative bottlenecks — not necessarily a charter to abolish or dilute the guarantee. It was a call for strengthening the law, not repealing its identity or rights-based foundation. Among the most significant structural changes in the VB-G RAM G is the shift from unconditional, demand-driven obligation to budget-capped provisioning, with the states bearing a 40 per cent share of expenditure. This marks a dramatic reversal from the earlier fully centrally funded model, with significant fiscal consequences for poorer states already grappling with limited resources. Telangana’s own estimates suggest that the new funding regime may cost the state Rs 1,000-1,500 crore yearly just to maintain employment levels; similar strains are foreseeable in Bihar, Odisha, and other agrarian economies. Moreover, the shifting of costs to states — some of which are governed by opposition parties — introduces a partisan dimension, threatening uneven implementation.

The danger of capped budgets is not theoretical. Even under the old dispensation, funding gaps and wage delays were common. Analysts have long warned that with fixed allocations, rural employment generation would shrink further, enhancing economic vulnerability and driving distress migration to urban centres. By putting cash in the hands of women, Dalits, and landless labourers, MGNREGA weakened feudal patronage, expanded their bargaining power, and shifted power relations within villages.

Further, removing Gandhi’s name from a scheme that historically empowered rural workers symbolises a deeper erosion: A retreat from the idea that the state exists to secure the dignity of labour. Gandhi’s philosophy — of trusteeship, community self-reliance, and ethical governance — lent ideological coherence to the programme. Its removal signals that certain narratives of nationhood and historical memory are being supplanted by others. While proponents of VB-G RAM G claim that extending guaranteed workdays to 125 days will benefit rural families, such promises ring hollow without commensurate funding and implementation capacity. A scheme can “guarantee” more days on paper but deliver fewer in practice if budgets are constrained and administrative burdens intensified.

In the history of Indian social policy, such a moment demands not obeisance to political branding, but critical resistance grounded in economic evidence and moral clarity. MGNREGA, for all its flaws and implementation challenges, was a testament to the promise of democracy as distributive justice. To defang it is to betray that promise.

The writer was Lok Sabha MP for five consecutive terms