Get a fix on rural employment scheme

On Tuesday, GoI introduced Viksit Bharat Guarantee for Rozgar and Ajeevika Mission (Gramin) Bill 2025 in Lok Sabha, seeking to replace the 20-yr-old MGNREGA. While the rural economy has, indeed, evolved since 2005, the nature of the proposed overhaul suggests the issue's more than just about updating an ageing law. Although the Bill proposes to raise maximum guaranteed workdays from 100 to 125, this increase will be contingent on central allocations and approvals - unlike MGNREGA's demand-driven entitlement. Village-level plans will be drafted by gram panchayats. But these will also require central nod. In effect, the Bill restructures the programme as a centrally-sponsored scheme (CSS) with 60:40 Centre-state cost-sharing arrangement, but without MGNREGA's demand-driven character.

MGNREGA has long been dismissed by critics as a 'ditch-digging' programme, failing to create durable assets, and flagged as a fiscal burden due to its 100% central funding. For FY26, GoI released ₹68,394 cr to states and UTs, against a budgeted ₹86,000 cr. Pending liabilities exceed ₹10,127 cr till November. Under the new framework, part of the financial burden shifts to states, making implementation dependent on their fiscal capacity.

Persistence of a rural employment programme points to the shortfall in job creation. Despite being dogged by corruption - failures of systems, rather than beneficiaries - the scheme has created assets, and measures such as geotagging of works have improved transparency. Like many CSSs, its flaws are evident. Fixing them is GoI and states' responsibility, not justification for pushing costs of a leaky system onto the economically weakest amid fragile employment and fragmented politics that can have a bearing on allocation.