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The Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS), a crucial lifeline for millions of rural households in India, is facing accusations of systematic sabotage due to the government's unchanged budgetary allocation of Rs 86,000 crore for the 2025-26 fiscal year. This allocation, criticized by the NREGA Sangharsh Morcha, an umbrella body of workers and activists, is deemed inadequate and represents a significant decrease in real terms when considering inflation. The Morcha highlights that the allocation, equivalent to 0.24% of the GDP, is effectively Rs 4,000 crore lower than the previous year's allocation when adjusted for inflation. This stagnation, despite the rising cost of living and persistent inflation, underscores a concerning trend of neglecting a vital social safety net program.
The implications of this underfunding are far-reaching and deeply troubling for India's rural population. The scheme, which guarantees 100 days of employment per year at minimum wages, is failing to meet its mandate. Data reveals that households have received on average less than 45 days of work this fiscal year, a sharp decline from approximately 52 days in the previous year. This shortfall in employment translates directly into increased financial distress for rural families, already struggling with the burden of inflation. Furthermore, the existing deficit of Rs 9,860 crore and outstanding wage arrears of Rs 6,949 crore exacerbate the situation, with approximately 20% of the budget allocated to clearing past dues. This demonstrates a vicious cycle where limited funds restrict work opportunities, simultaneously creating ever-growing debts, hindering the schemes effectiveness, and further diminishing the already underfunded budget.
The NREGA Sangharsh Morcha forcefully argues that the government's strategy of low initial allocation is a deliberate attempt to suppress the demand for work under MGNREGA. Coupled with the already low wage rates – a subject of ongoing concern – this policy actively discourages participation in the scheme. The Morcha goes further, labeling this inadequate funding not as simple negligence, but as ‘systematic sabotage’ of a critical program for millions of vulnerable individuals. This accusation finds support in the findings of the parliamentary standing committee on rural development and panchayati raj. The committee’s December report emphasized the sharp rise in inflation and cost of living, noting that the current daily wage rate of around Rs 200 in many states is woefully inadequate compared to prevailing market labor rates. This inadequacy of the wages is further highlighted when compared with the 2019 recommendations of an expert committee, which suggested a need-based minimum wage of Rs 375 per day, a figure that has not been reflected in MGNREGS wage revisions.
The issue of wage revisions under MGNREGS is further complicated by the use of outdated benchmarks. The standing committee criticized the continued use of 2010-11 CPI-AL (Consumer Price Index – Agricultural Labour) values to adjust wages, deeming this practice incompatible with current inflation and the cost of living. Despite the committee's recommendation to revise wages accordingly, as of March 2024, no administrative unit in India pays more than Rs 374 per day. The persistent gap between recommended and actual wage rates underscores the deeply troubling implications of government inaction and undermines the scheme's effectiveness in providing a safety net for rural workers. The underfunding, coupled with the insufficient wage rates, effectively undermines the program's core purpose and perpetuates a cycle of poverty and economic hardship within rural communities, directly impacting their ability to access their constitutional right to employment.
The inadequate funding and low wages have dire consequences beyond the immediate financial hardship of rural workers. The reduced demand for work under the MGNREGA scheme also leads to a decline in rural infrastructure development. The scheme plays a vital role in creating and maintaining essential infrastructure in rural areas, from water conservation projects to rural road construction. The underfunding therefore not only negatively impacts individuals but also hinders the overall development of rural areas. The cumulative effect is a widening disparity between urban and rural areas, exacerbating existing inequalities. This issue transcends mere financial concerns; it exposes systemic issues within governance and resource allocation, questioning the government's commitment to its own social welfare programs and its long-term implications for India's rural landscape.
Source: Stagnant MGNREGS Allocation Part of Govt's ‘Sabotage’ of Scheme: NREGA Sangharsh Morcha