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The central government amended the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) on September 23, 2025.
Sixty-five per cent of MGNREGA funds will now be spent on water conservation projects in areas with “extreme water stress”. This amount will be 40 per cent in areas with less water stress. Finally, in areas without water stress, at least 30 per cent of funds will be spent on water conservation projects.
The Union Ministry of Rural Development, in a notification issued on September 23, amended paragraph 4(2) of Schedule I of the MGNREGA Act, mandating minimum expenditure on water-related works.
The notification states, “After the provision in sub-paragraph (2) of paragraph 4 of Schedule I of the Mahatma Gandhi National Rural Employment Guarantee Act, 2005, the following provision shall be added, namely:- It is provided that the assessment units (blocks) classified as over-exploited, critical, semi-critical and safe in the dynamic groundwater resources assessment report available with the Central Ground Water Board shall be considered priority areas for intervention and the District Programme Coordinator or Programme Officer shall ensure that a minimum percentage of works, by cost, in the respective assessment units (blocks) are devoted to water conservation, water harvesting and other water-related works.”
It is now mandatory to spend a minimum of 65 per cent on rainwater harvesting for ‘dark zone’ (excessive groundwater exploitation) districts, 40 per cent for ‘semi-critical’ districts, and 30 per cent for other districts, according to the notification.
This arrangement has been implemented by amending Paragraph 4(2) of Schedule 1 of MGNREGA, which previously allowed the Gram Panchayat to prioritise works based on local resources, potential of the area, and needs.
Paragraph 4(2) of Schedule 1 of MGNREGA states, “The prioritization of programmes shall be determined by each Gram Panchayat in the meetings of the Gram Sabha, keeping in view the potential of the local area, its needs, local resources, and the provisions of paragraph 9. [Provided that the District Programme Coordinator shall ensure that at least 60 percent of the works (by cost) undertaken in the district are for the creation of productive assets directly linked to agriculture and allied activities, including development of land, water, and trees.]
Speaking at a press conference on September 25, 2025, Union Rural Development Minister Shivraj Singh Chouhan said, “MGNREGA funds will now be prioritised for water conservation across the country, boosting groundwater levels and accelerating water conservation efforts. This policy allocation will ensure resources are directed to areas where they are most needed, shifting from reactive measures to preventative, long-term water management.”