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A little past midnight on December 19, 2025, as the Parliament’s winter session drew to a close, the Union government rushed through a piece of legislation repealing one of India’s most celebrated social welfare programmes, the Mahatma Gandhi National Rural Employment Guarantee Act, 2005 (MGNREGA). It was substituted with Viksit Bharat-Guarantee for Rozgar and Ajeevika Mission (Gramin) (VB-G RAM G) Act, 2025. The government says the new law aligns with its “Viksit Bharat 2047” vision and strengthens rural income security by raising work guarantee to 125 days per household, from 100 under MGNREGA. Not everyone is convinced. The move has drawn sharp criticism from grassroots organisations and policy veterans who spent years conceptualising, implementing and defending MGNREGA, regarded as the world’s largest such programme.
With a multi-pronged approach for rural development and poverty alleviation, MGNREGA was India’s first law to guarantee employment and wages. Under this demand-driven rights-based programme for livelihood security, any registered rural household could seek up to 100 days of unskilled manual work per financial year. The state was required to provide employment within 15 days, failing which workers were entitled to an unemployment allowance. By many measures, MGNREGA proved transfor mative. A decade-long assessment commissioned in 2014 by the National Institute of Rural Development and Panchayati Raj in Hyderabad, Telangana, shows that rural employment rose from 21 million person-days to 55 million over its first decade of implementation. The scheme helped 69 per cent of the surveyed households avoid hunger, while migration fell by 57 per cent. Nearly half (47 per cent) reported that MGNREGA helped them cope with illness and 35 per cent said that it spared them from demeaning or hazardous work. The programme also generated a large stock of crucial assets across rural areas. More than half the respondents said roads had been built where none existed; 96 per cent reported that dirt tracks were replaced with paved roads. Afforestation and water-conservation projects helped improve irrigation and curb soil erosion dramatically. The Union government acknowledged similar gains. Critics fear the new law will weaken this safety net.
One of the most contested provisions of the new law concerns the very idea of “guarantee” that is embedded in MGNREGA and its universal, demand-driven architecture. Yogendra Yadav, a political activist and commentator on rural policy, warned ahead of the law’s passage that the new framework concentrated control with the Centre while transferring implementation risks to states. Economist and social activist Jean Drèze, who played a key role in shaping MGNREGA, also highlighted that employment is no longer guaranteed on demand but only to the extent that the Centre chooses to underwrite it.
Several researchers warn that the new law’s normative budget allocation provision opens the door to political favouritism and victimisation of opposition-ruled states, similar to the experience of West Bengal in December 2021. Citing corruption concerns, the Union government suspended wage payments under MGNREGA in the state and stopped issuing work permits from March 2022. The move deprived some 25 million workers of employment. During field visits to Purulia and Bankura districts in 2023, Down To Earth found a rise in migration, household debt, school dropouts and reduced nutritious intake. Development economist Jayati Ghosh warns the new framework poses serious risks to federalism in India, and that the unprecedented powers to the Centre allows it to weaponise them as a political tool against opposition-ruled states.
Under the new law, the Centre will fund only 60 per cent of scheme costs and states (barring northeastern and Himalayan states and the Union Territories) will shoulder 40 per cent of the burden, compared with a 90:10 split under MGNREGA. Chakradhar Buddha, a social scientist with LibTech India, a non-profit that works on democratic engagement in rural public services delivery, says wealthier states have historically drawn more benefits from MGNREGA. The revised budget-sharing clause will unevenly impact poorer states which already face financial stress and high migration. Faced with tighter budgets, these states may suppress demand for work rather than expand it. Laavanya Tamang, senior researcher at the Foundation for Responsive Governance, adds that during the pandemic year of 2021-22, demand-driven MGNREGA spending rose sharply to Rs 1.11 lakh crore as person-days of work jumped from 2,650 million to 3,690 million. Under the new framework, states would bear the full cost of such surges once central allocations are exhausted, making crisis response far more difficult.
Another contentious provision is the “switch-off clause”, which bars work for up to 60 days during peak agricultural months. Trade-union leaders say this weakens workers’ bargaining power without guaranteeing alternative employment. Researchers warn that such exclusions will deepen inequality and intensify migration.
This article was originally published in the January 16-31, 2026 print edition of Down To Earth