New wage programme set to replace MGNREGA no longer demand-driven, critics warn

A proposed wage employment programme that the government plans to introduce in Parliament would end the demand-driven nature of the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA), which it seeks to replace, researchers and labour rights activists have warned.

The Viksit Bharat-Guarantee for Rozgar and Ajeevika Mission (Gramin) Bill, 2025, expected to be tabled during the ongoing winter session of Parliament, would replace the Mahatma Gandhi National Rural Employment Guarantee Act, 2005. Critics say the new framework weakens workers’ legal right to employment and centralises control over funding and implementation.

Researchers and activists argue that the proposed legislation — also referred to as the VB-G RAM G Bill — could harm rural workers rather than strengthen livelihoods.

Advocate Purbayan Chakraborty, who has represented the trade union Paschim Banga Khet Majoor Samity in cases relating to rural employment, said the proposed law would fundamentally alter the nature of the right to work.

“The proposed VB-G RAM G Bill effectively repeals the right to work by converting a legal entitlement into a discretionary, budget-capped scheme controlled by the Centre,” he said. “This is not reform; it is a rollback of constitutional guarantees won through decades of workers’ struggles.”

Under MGNREGA, rural households are legally entitled to up to 100 days of work a year on demand. If employment is not provided within 15 days of a request, workers are eligible for an unemployment allowance, with labour costs fully borne by the Centre.

Activists said the new bill replaces this demand-driven model with a supply-driven one. The draft legislation stated that “the Central Government shall determine the state-wise normative allocation for each financial year, based on objective parameters as may be prescribed”. It further added that any expenditure beyond this allocation would have to be borne by state governments, in a manner determined by the Centre.

Carina Singh, a researcher working on labour rights, said the provisions allow the central government to determine funding levels unilaterally, which would in turn limit how many days of employment states can provide.

“This completely upends the logic of MGNREGA, where funding follows demand,” she said. “Under the new bill, demand must fit within a predetermined budget.”

Labour groups argued that this change undermines the statutory right to work. In a statement, the NREGA Sangharsh Morcha, a coalition of workers’ organisations and activists, said the bill grants excessive discretionary power to the central government. “While MGNREGA guarantees work to any adult willing to do unskilled manual labour in any rural area, the proposed law limits this right. Section 5(1) of the draft bill states that employment will be provided only in rural areas ‘as notified by the central government’, offering at least 125 days of work per household,” it stated. 

Activists warn that if a rural area is not notified by the Centre, residents would have no legal right to employment, effectively converting a universal guarantee into a discretionary scheme at the government’s mercy.

The bill also revises the cost-sharing formula between the Centre and states. For north-eastern states, Himalayan states and certain union territories — including Uttarakhand, Himachal Pradesh and Jammu and Kashmir — the Centre would cover 90 per cent of costs, with states contributing 10 per cent. For all other states and union territories with legislatures, the ratio would be 60:40.

Chakradhar Buddha, a researcher with LibTech India, said this represented a significant shift. “Earlier, the Centre bore 90 per cent of expenditure nationwide,” he said. “This change places a heavier financial burden on states, particularly poorer ones.” LibTech India works on transparency and accountability in rural public service delivery.

The bill proposed increasing the employment guarantee to 125 days per household per year, up from 100 days under MGNREGA. While activists welcome the higher ceiling in principle, they say it offers no real guarantee.

“The bill makes it clear that the Union government will decide where the programme is implemented,” Buddha said. “Employment also depends on states’ ability to fund their share. It is no longer universal or guaranteed in the true sense.”

He added that while the Economic Survey 2024 noted discrepancies between demand for work and employment generated on the ground, the proposed changes would not resolve that issue and instead undermine the demand-driven character of MGNREGA.

Another major shift under the bill is the mandatory use of technology. To ensure transparency and accountability, the legislation requires biometric authentication of workers and officials, as well as the use of geospatial tools, satellite imagery, digital mapping and real-time monitoring through mobile applications.

Buddha said technology had previously been used as a support tool but would now become compulsory. “Technology does not always function reliably in rural and remote areas,” he said.

The bill also restricts employment during peak agricultural seasons. It states that no work shall be undertaken under the scheme during such periods, as notified, to ensure adequate availability of agricultural labour.

Activists argue this could adversely affect tribal and marginalised communities, where employment under MGNREGA often supports agriculture-related activities such as horticulture and plantation work.

“If there is no work under the new wage programme during agricultural months, tribal communities will be affected,” Buddha said.

The NREGA Sangharsh Morcha said the provision would legally deprive workers — particularly women — of employment for at least two months each year.

Researchers and activists have described the VB-G RAM G Bill as a rollback rather than a reform, arguing that it replaces a rights-based programme with a centrally controlled, budget-capped and surveillance-heavy scheme.

“What is deeply troubling is that this bill appears to have been conceived without meaningful consultation with workers, trade unions or state governments,” Chakraborty said. “With more than 260 million registered workers and 126 million active workers affected, such sweeping changes should not be pushed through without democratic consultation.”

They argue the bill violates the spirit of the Constitution, undermines the 73rd Constitutional Amendment and shifts power away from workers, gram sabhas and states to the Union government.

Rejecting the proposed legislation, the NREGA Sangharsh Morcha has called for its immediate withdrawal.