MGNREGA may have been replaced, but its significance in rural areas is undeniable

The Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) has been a flagship programme ever since it was launched in 2005. It guaranteed 100 days of employment as a legal right and held the Indian state accountable if it failed do so. As with different programmes, this programme was riddled with challenges. Generating over 4,585 crore person days of employment since its inception, MGNREGS has been a crucial programme for the rural informal sector which struggles for employment during lean seasons, disasters and pandemic-like situations such as COVID-19. What was needed, of course, was an overhaul of the programme in a positive manner.

The Centre has replaced the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA), 2005, with the Viksit Bharat – Guarantee for Rozgar and Ajeevika Mission (Gramin) Act, 2025, for a significant renewal and overhaul of India’s rural employment guarantee.

VB- G RAM G replaces MGNREGA with a modern statutory framework that enhances livelihood security and is aligned with the national vision of Viksit Bharat @2047.

The Act provides a statutory guarantee of not less than 125 days of wage employment per rural household in each financial year to households whose adult members volunteer to undertake unskilled manual work (Section 5(1)).

To facilitate adequate availability of agricultural labour during peak sowing and harvesting seasons, the Act empowers states to notify an aggregated pause period aggregating to 60 days in a financial year (Section 6).

The full 125-day employment guarantee remains intact, to be provided during the remaining period, ensuring a calibrated balance that supports both agricultural productivity and worker security.

The Act mandates payment of wages on a weekly basis or, in any case, within 15 days of completion of work (Section 5(3)). In cases of delay beyond the stipulated period, delay compensation shall be payable in accordance with the provisions laid down in Schedule II, reinforcing wage security and protecting workers from delays.

Wage employment under the Act is explicitly aligned with the creation of durable public assets across four priority thematic domains (Section 4(2) read with Schedule I):

1.  Water security and water-related works

2.  Core rural infrastructure

3.  Livelihood-related infrastructure

4.  Works to mitigate extreme weather events – This is a welcome addition since the country has been reeling with various disasters like cyclone, floods, droughts and so on.

According to the Centre, the Act does not dilute the right to demand employment. On the contrary, Section 5(1) places a clear statutory obligation on the government to provide not less than 125 days of guaranteed wage employment to eligible rural households. The expansion of guaranteed days, together with strengthened accountability and grievance redressal mechanisms, reinforces the enforceability of this right.

The Act removes earlier dis-entitlement provisions and restores unemployment allowance as a meaningful statutory safeguard. Where employment is not provided within the stipulated period, unemployment allowance becomes payable after 15 days.

Status in Odisha and India

While there will be many critiques regarding the new legislation, it is important to evaluate how MGNREGS worked in the states and how communities can avail the full benefits of the scheme, now that it has been changed.

In Odisha, for example, the average days of employment under MGNREGS is 42.4 in 2025-2026 and 51.02 in 2024-2025. The national average rarely crosses 50 days. Only 11 per cent of the registered workers between ages 31 and 50 availed MGNREGS in Odisha and only 3.5 per cent of the households completed 100 days of employment in 2025-2026 and 8.6 per cent in 2024-2025. So clearly, the 100 days of employment was a dream for many households which wanted to avail this programme.

At the national level, the number of households completing 100 days of employment increased from 0.36 to 0.45 crore and the percentage of households completing 100 days of employment from 5.8 per cent to 7.5 per cent in FY 2023-24, compared to the previous FY.

In a study done two years ago by ActionAid in 25 districts of Odisha on the access to various entitlements like MGNREGS by women, it was found out that out of 1,254 interviewees, 27 per cent were enrolled under MGNREGS where 92 per cent of them had their own job card. But 61 per cent of the beneficiaries did not find the remuneration to be sufficient. Also, 50 per cent of them mentioned that they did not find jobs through all seasons. There were around 22 per cent who complained about the lack of drinking water at the work sites. Various works undertaken in the village under the scheme are pond renovation and road construction. But the major drawback related to this scheme is the lack of awareness and delayed payment, which leads to such low turnout.

Key recommendations

Some of the key recommendations of the study, which are relevant even today after changed circumstances, are:

• Work availability and timely wage payments need to be streamlined in the MGNREGS scheme

• Contractor system in the MGNREGS scheme needs to be abolished and people should be provided work directly and the holding of MGNREGS card holders’ bank account passbooks by the contractor should be prohibited

• Documentation process should be simplified, and a person should be able to know about her/ his status of application details such as rejected/ approved etc. to get a job card under MGNREGS

•Government should increase the wage rates and wages should be credited to the worker’s account on a weekly basis. The worker should be provided other benefits according to the Standard Operating Procedure under MGNREGS

•For women beneficiaries, there must be a provision of creche and drinking water facilities at the place of work

•An effective monitoring system should be made to monitor the regular payment of MGNREGS wages so that more needy women become interested to join the work.

Way forward

Whether the new Act weakens workers’ legal right to employment and centralises control over funding and implementation thus affecting its implementation, remains to be seen in the field. But nevertheless, the importance of employment generation through this scheme is undeniable in rural areas.

The government should mandate establishing monitoring committees at village/gram panchayat level and a district-level task force for organising awareness and capacity building for better accessibility of the government schemes for women and vulnerable sections of the society like scheduled castes, scheduled tribes, persons with disability and so on. Periodically, information, education and communication in local languages, especially tribal languages, is needed for hard-to-reach and particularly vulnerable tribal group areas.

Monitoring and evaluation mechanisms need to be strengthened at all levels, with clearly designed indicators and means of verification. Feedback mechanism needs to be developed for better implementation of schemes.

The details about the schemes and the process of application needs to be displayed in the panchayat office and should be simpler for the beneficiary, so that the neediest people apply for the scheme. The sarpanch (village head) will need to provide support to the beneficiary by providing an application form and ensuring that they get benefits from the scheme. A person from the panchayat office should be dedicated to help village residents enroll under different government schemes so that the people of rural areas benefit more. A written acknowledgement letter should be provided to the beneficiary when they are applying for any government scheme. The ward member should follow up regularly as to whether the beneficiaries are getting the benefit on time. Panchayat level / village level grievance cells should be organised by the administration, so people can share the problems they are facing.

India’s rural communities, especially informal workers, are at a crossroads. With unemployment levels rising, climate-related disasters aggravating and the agriculture sector shrinking, it is important for us to help these communities tide over all challenges and contribute to the country’s growth. 

Debabrat Patra, Associate Director and Humanitarian Lead, ActionAid Association

The views expressed in this article are individual and do not necessarily reflect that of the organisation

Views expressed are the author’s own and don’t necessarily reflect those of Down To Earth