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The Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA), a flagship program designed to guarantee 100 days of wage employment to rural households in India, is facing a severe crisis. A recent report from the NREGA Sangharsh Morcha, a consortium of MGNREGA workers and NGOs, reveals a drastic decline in the average number of workdays provided under the scheme. In 2024-25, the average workdays per household plummeted to a mere 44.62 days, a significant drop from 52.08 days in the previous financial year. This represents a substantial shortfall from the guaranteed 100 days, highlighting a critical failure in the program's implementation and a deepening crisis for rural livelihoods.
The reduction in workdays is directly linked to a chronic underfunding of the MGNREGA. The budget for the program remained stagnant at ₹86,000 crore for the 2024-25 fiscal year, the same as the previous year. This static allocation, coupled with the persistent problem of delayed wage payments, severely restricts the program's capacity to fulfill its mandate. As of February 1st, 2025, a staggering ₹9,860 crore deficit existed, alongside pending wages of ₹6,948.55 crore as of January 25th. This recurring trend, where a significant portion of the budget – approximately 20% – is allocated to clearing past dues, leaves considerably less funding available for actual work generation. Considering this, the effective allocation for the 2025-26 fiscal year will likely be no more than ₹70,000 crore, representing a further reduction when adjusted for inflation.
This inadequate budgetary allocation has far-reaching consequences for rural communities. The NREGA Sangharsh Morcha warns of massive delays in wage payments, exacerbating the financial distress of already vulnerable rural workers. The suppression of work demand due to insufficient funds denies people their fundamental right to employment. Moreover, the reduced funding compromises the quality of asset creation under the scheme, ultimately weakening rural infrastructure and hindering sustainable development. The decline in both the number of workdays and the quality of work directly impacts the livelihoods of millions of rural families, exacerbating existing inequalities and deepening rural poverty.
The issue extends beyond mere financial constraints; it highlights a broader systemic problem of government neglect towards rural India. Congress general secretary Jairam Ramesh criticized the government's indifference to rural livelihoods, characterizing the underfunding of MGNREGA as a neglect of a 'crucial safety net.' He emphasized that the reduced reach of the scheme leaves drought-hit and poor rural workers particularly vulnerable. Furthermore, the insufficient budget precludes any significant increase in wages paid to workers. Despite a 7% increase in the minimum average notified wage rate, this increase is dwarfed by the estimated ~5% Consumer Price Index (CPI) inflation. This wage stagnation represents a broader national crisis, with MGNREGA serving as a stark example of the economic hardships faced by India's rural workforce.
The implications of this ongoing crisis are profound. The consistent shortfall in providing the guaranteed 100 days of work undermines the core purpose of MGNREGA. It not only jeopardizes the economic stability of rural households but also hinders rural development and infrastructure improvement. The failure to adequately fund and implement the scheme reflects a broader disregard for the needs and rights of rural communities. Addressing this crisis requires a significant increase in budgetary allocation, coupled with robust mechanisms to ensure timely wage payments and transparent program implementation. Failure to do so will continue to exacerbate rural poverty and inequality, further destabilizing India's social and economic fabric. The continued underfunding and resulting consequences of MGNREGA's shortcomings underscore the urgent need for comprehensive policy reforms to protect the livelihoods of India's rural population and ensure the effective implementation of this crucial social safety net.
Source: Average workdays per household is down to just 44 days under MGNREGA