MGNREGA AT THE CROSSWORDS: SCRAPPING OR STRENGTHENING

ABSTRACT 

The Mahatma Gandhi National Rural Employment Guarantee Act of 2005 (MGNREGA) is  one of the most remarkable policies ever made in India, switching the emphasis on welfare to  a rights-based approach that allows every rural worker to claim their employment right through  the law. Though the act has been constantly criticized for its fiscal burden, inefficiency, and  politics, it legally still gives a stronghold for social justice, livelihood security, and participatory  democracy. This article presents the idea that MGNREGA’s challenges are more a result of the  inefficiencies in implementation and strict allocations than weak legislation. The article  examines the historic constitutional provisions, case laws, and governance mechanisms to  conclude that preserving the democratic and constitutional promise of the Act requires reform  and a stronger political commitment—not repeal.

MGNREGA AT THE CROSSWORDS: SCRAPPING OR  STRENGTHENING 

Introduction: 

The Mahatma Gandhi National Rural Employment Guarantee Act, 2005, or MGNREGA, remains one of the most ambitious social security acts in the Indian Republic1. Introduced with  a vision to ensure at least 100 days of wage employment in rural areas2, MGNREGA was  supposed to be a safeguard against poverty, migrating poverty, or unemployment3. But with the  passing of nearly two decades, this act too has reached a decisive point4in time. Financial  apprehensions, charges of inefficiency, and politicizing have culminated in demands for toning  down or striking down this act altogether5. This blog would investigate whether the act has  outlived itself or if the actual problem still remains in implementing it efficiently. 

MGNREGA: From Welfare to Legal Entitlement: 

Unlike other poverty alleviation programmes, the MGNREGA is not just a scheme but a  statutory right6. The statute has converted employment-a discretionary benefit-into a legal right  of the rural citizen to insist on work from the State7. Such a rights-based approach is in spirit  with the letter and intent underlying Article 41 of the Constitution of India, which directs the  State vis-à-vis securing for its citizens the right to work within the limits of its economic  capacity8. The MGNREGA further strengthens the wider constitutional vision of social justice  and dignity under Article 21, since livelihood is inextricably linked with the right to life9. By  legally obliging employment within a fortnight from demand-or instead, unemployment  allowance-the Act places accountability on the State and makes governance justiciable rather  than charitable10. This is the legal architecture that sets MGNREGA apart from earlier rural employment experiments and accounts for its continuing relevance in the welfare architecture  in India. 

Ground Realities: Employment Security vs Administrative Bottlenecks: 

Though it has a very sound legal framework, the story of the implementation of MGNREGA  is quite complex11. Delayed payment of wages has remained one of the most enduring problems  in the implementation of MGNREGA12. It has happened many a time where wages have had  to be waited for weeks or even months13. The growing dependence on digital gadgets such as  Aadhaar payment and the National Mobile Monitoring System (NMMS) has widened the  digital divide 14 . Technology has been aimed at combating corruption and increasing  transparency; however, its inability to identify eligible recipients through biometric  authentication, lack of smartphones, and poor connectivity has left eligible beneficiaries out15. There appears to be an emerging disparity between the demand for employment and  employment supplied. In different states, employment creation, despite the demand existing, is  limited by budget or governmental reluctance16. This type of bottleneck creates the impression  that the Act is inefficient, where in truth the challenge lies in the implementation of the law  rather than the law itself.17 

MGNREGA and Cooperative Federalism: A Constitutional Stress Test: 

MGNREGA is a scheme that tests the constitutionality of India’s model of cooperative  federalism because it deals with issues relating to legislative power, fiscal federalism, and  administrative accountability18. MGNREGA was created under Parliament’s competence under  Entry 23 of the Concurrent List (social security and social insurance19 ), the act places the  primary financial obligation on the Union, but States and Panchayati Raj Institutions are  responsible for implementation20. The Ministry of Rural Development data shows that delays  in payment of wages have often coincided with non-release of funds from the Centre, resulting in arrears of more than ₹10,000 crore in several financial years21. The non-release of funds  leads to the violation of statutory rights under Section 3(3) of the Act which provides for  payment of wages within fifteen days22. In a case Swaraj Abhiyan v. Union of India (2016), the  Supreme Court declared that non-payment of wages under MGNREGA is a violation of Article  21 23and it cannot be argued that statutory rights can be diluted due to budgetary constraints24.  The Court went on to say that, by treating MGNREGA as a discretionary expenditure and not  a legal obligation25, the Centre is acting in a manner that erodes decentralisation. The Court  further criticised the Centre for treating MGNREGA as a discretionary expenditure rather than  a legal obligation. The erosion of decentralisation is equally evident, as Panchayats are often  denied real planning autonomy envisaged under Sections 13–15 of the Act 26 . Thus,  MGNREGA’s governance failures reflect not legislative infirmity, but a breakdown of  cooperative federalism, where constitutional responsibility is fragmented without enforceable  fiscal accountability27. 

Fiscal Burden or Economic Multiplier? 

Another persuasive argument against the MGNREGA is that it is a burden on the exchequer28.  It has been termed a “cost with diminishing returns.29” The other argument that it overlooks is  that the program acts as a stabilizer in the economy, especially in times of crisis30. MGNREGA  has always worked as a shock-absorbing mechanism during drought conditions, agrarian crisis  situations, and especially during the pandemic situation brought on by the outbreak of the  Covid-19 pandemic, as MGNREGA then became a life-saver for the migrant workers who migrated to the countryside31. The money that is earned from MGNREGA gets immediately  absorbed into the economy32. In addition, the assets developed through the scheme, such as  water conservation, rural roads, and soil improvement, will serve to enhance the long-run  productivity of the rural areas33. In fact, when the program is looked at as a whole, MGNREGA  might be termed neither a welfare expenditure program nor a development program. 

MGNREGA as a Democratic and Rights-Enforcing Institution: 

The MGNREGA has to be perceived to be more than just an employment scheme and to  be considered as an unusual institutionalisation of participatory democracy in welfare  governance 34 . The Actss demand-driven framework turns rural workers into rights holders, giving them the power to bring the State to court—the feature is rare in Indian  social welfare legislation35. The Actss Section 17 requires social audits which have been  recognised by the judiciary as tools of transparency and accountability36 . In 2111, the  Indian Supreme Court, in the case of Centre for Public Interest Litigation v. Union of India,  pointed out the significance of social audits in curbing corrupt practices and making  public schemes democratically governed37. Data collected from different studies further  confirms this democratic feature: official figures say that almost 55–58% of the national  total MGNREGA workers are women, thereby, reinforcing the constitutional principle of  womenss equal treatment under Articles 14 and 1538. Moreover, the Scheduled Castes  and Scheduled Tribes together generate about 41% of the total person-days, which indicates the Actss redistributive nature39. By giving the lesser privileged communities the  opportunity to participate in planning, monitoring, and execution, MGNREGA brings  about the constitutional vision of dignity articulated in Olga Tellis v. Bombay Municipal  Corporation (1985) where the right to livelihood was held to be part of Article 21 40 .  Therefore, diminishing MGNREGA means eliminating a legally-based democratic space  that gives power to the rural poor not by charity but through the support of enforceable  constitutional rights41. 

Scrapping MGNREGA: Constitutional and Legal Implications: 

Scrapping or drastically diluting MGNREGA has raised serious constitutional and legal issues.  Once the State confers a statutory right, its arbitrary withdrawal can infringe the doctrine of  legitimate expectation, particularly when millions depend upon it for survival42. Indian courts  have, over time, continued to expand the ambit of socio-economic rights under Article 21,  considering livelihood as the core aspect of human dignity 43 . Any attempt to dismantle  MGNREGA, without offering an equally efficacious alternative, may therefore invite judicial  intervention on the grounds of violating reasonableness, non-arbitrariness, and  proportionality.44 More importantly, being an Act of Parliament, the MGNREGA cannot be  undone either through executive neglect or budgetary starvation. Weakening the  implementation without formal repeal runs the risk of undermining parliamentary sovereignty  and constitutional governance. 

Political Narrative vs Policy Performance: 

The MGNREGA has gradually transformed into a politically contested arena45. While it has  been seen as a “symbol of inclusive governance46” by some, others have seen it as “entitlement politics.47 ” Centre-State relationships are also adding to its complexities, with some states  causing performance to slump by accusing the Centre of late disbursement of funds. 48 Corruption charges are often referred to in an attempt to discredit the scheme49 . oowever,  scholarly work and social audit reports have indicated that leakages do exist but are in no way  specific to MGNREGA and are often exaggerated in the political discourse50. It may be noted  that the social audit process in MGNREGA is among the most effective mechanisms of  accountability51. The issue, therefore, is not with the intention of the scheme itself, but with the  narrative that gets the better of facts52. The truth about policy analysis is that it cannot be based  on ideology53. 

The Way Forward: Reform, Not Repeal: 

The discussion on MGNREGA needs to transcend the polarity of doing away with it versus  keeping it as it is. The challenge of this legislation is the need for change at the system level.  There is a need for timely payment of wages54. This should be done with adequate funding and  easy means of payment. Technology ought to facilitate and not hinder the system, and it also  has to be implementable in the rural context. Improving planning and making institutions more  accountable by strengthening the process of decentralisation with empowered Panchayati Raj  Institutions. Integrating the objectives of climate change adaptation, such as conservation of  water, afforestation, and sustainable agriculture, into the implementation of the MGNREGA. More than anything else, political will is required. The effectiveness of MGNREGA lies not in its presence on paper but in the State’s determination to ensure the right to work in letter and  spirit. 

Conclusion: 

MGNREGA is today at a juncture not because it has faltered, but because it forces the  government to face its constitutional obligations55. Abolishing MGNREGA would not ensure  that rural poverty and unemployment are addressed—but rather, it would simply ensure that  millions of Indians lose access to a safety net that is legally binding. An improvement in  MGNREGA would emphasize India’s adherence to social justice, dignity, and development. 

The challenge, therefore, is not whether India can afford the MGNREGA, but whether it can  do without the right to work. 

Reference(S):

1Jean Drèze, Employment Guarantee Act: Promise and Reality (Oxford University Press 2008). Ministry of Rural Development, Government of India, MGNREGA Operational Guidelines (2023)

2 The Mahatma Gandhi National Rural Employment Guarantee Act 2005, s 3(1) 

3 People’s Union for Civil Liberties v Union of India (2007) 1 SCC 397 (SC) Azim Premji University, State of Working India Report (2021) 

4 Comptroller and Auditor General of India, Performance Audit of Mahatma Gandhi National Rural Employment  Guarantee Scheme (Union Government, 2020) 

5 Parliamentary Standing Committee on Rural Development, Demands for Grants (MGNREGA) (various years). Reserve Bank of India, State Finances: A Study of Budgets (RBI, various years). 

6 Mahatma Gandhi National Rural Employment Guarantee Act 2005 (MGNREGA), s 3

7 Mahatma Gandhi National Rural Employment Guarantee Act 2005, ss 3(1), 3(2). 

8 Constitution of India, art 41. 

9Olga Tellis v Bombay Municipal Corporation (1985) 3 SCC 545 (India)  

10 Mahatma Gandhi National Rural Employment Guarantee Act 2005, ss 3(1), 7.

11 Jean Drèze and Reetika Khera, The Battle for Employment Guarantee (Oxford University Press 2011).

12 Supreme Court of India, Swaraj Abhiyan v Union of India (2016) 7 SCC 498. 

13 Ministry of Rural Development, Government of India, Report of the Committee on Timely Payment of Wages  under MGNREGA (2019). 

14 Reetika Khera, ‘Aadhaar and Welfare: Promise and Reality’ (2019) 54(6) Economic and Political Weekly 61.

15 Supreme Court of India, Justice K.S. Puttaswamy (Aadhaar-5J) v Union of India (2019) 1 SCC 1.

16 National Campaign for People’s Right to Information, State of Employment Guarantee in India (2022)

17 Jean Drèze, ‘Employment Guarantee Act: A Legal Right, Not a Scheme’ (2014) 49(43) Economic and Political  Weekly 38. 

18 Granville Austin, The Indian Constitution: Cornerstone of a Nation (OUP 1999). 

19 Constitution of India sch VII, List III, Entry 23. 

20 Mahatma Gandhi National Rural Employment Guarantee Act 2005.

21 Ministry of Rural Development, Government of India, MGNREGA Annual Report (various years).

22 Mahatma Gandhi National Rural Employment Guarantee Act 2005, s 3(3). 

23 Swaraj Abhiyan v Union of India (2016) 7 SCC 498, para 15. 

24 ibid paras 16–17. 

25 ibid para 18. 

26 Mahatma Gandhi National Rural Employment Guarantee Act 2005, ss 13–15. 

27 Swaraj Abhiyan v Union of India (2016) 7 SCC 498, para 20. 

28 Gireesh Chandra Prasad, ‘India’s rural employment guarantee offered the poor a job security net that’s about to  weaken’ Mint (12 January 2026) https://www.livemint.com/opinion/online-views/india-rural-employment guarantee-mgnrega-poor-job-security-net-economy-distress-wages-agriculture-vb-g-ram-g 11766522642816.html accessed 13 January 2026 

29 Shankkar Aiyar, ‘MGNREGA to G-RAM-G: Pious promises, poor performance’ The New Indian Express (20  December 2025) https://www.newindianexpress.com/opinion/columns/shankkar-aiyar/2025/Dec/20/mgnrega-to g-ram-g-pious-promises-poor-performance accessed 13 January 2026 

30 IAS Editorial Team, ‘MGNREGA in India: Achievements, Challenges and the Case for Urban Employment  Guarantee’ Inclusive AS (2025) https://inclusiveias.com/mgnrega-achievements-challenges-upsc/ accessed 13 January 2026

31 Reuters Staff, ‘India File: Modi revamps landmark rural job scheme, drawing flak’ Reuters (14 January 2026)  https://www.reuters.com/world/india/india-file-modi-revamps-landmark-rural-job-scheme-drawing-flak-2026- 01-14/ accessed 13 January 2026 

32 Business Standard Staff Reporter, ‘Wages to workers: MGNREGA’s fluctuating fate during Modi government’  Business Standard (9 April 2024) https://www.business-standard.com/economy/news/wages-to-workers-mgnrega-s-fluctuating-fate-during-modi govt-124040900868_1.html accessed 13 January 2026 

33 Yogima Seth Sharma, ‘Assets created under MGNREGA has had a positive impact on agricultural productivity,  says Economic Survey 2023’ The Economic Times (31 January 2023)  https://economictimes.indiatimes.com/news/economy/indicators/assets-created-under-mgnrega-has-had-a positive-impact-on-agricultural-productivity-says-economic-survey-2023/articleshow/97488079.cms accessed 13 January 2026 

34 Jean Drèze and Reetika Khera, ‘The Battle for Employment Guarantee’ (2009) 44(48) Economic and Political  Weekly 42. 

35 Mahatma Gandhi National Rural Employment Guarantee Act 2005, ss 3, 19. 

36 Mahatma Gandhi National Rural Employment Guarantee Act 2005, s 17. 

37 Centre for Public Interest Litigation v Union of India (2011) 1 SCC 560 (SC). 

38 Ministry of Rural Development, Government of India, MGNREGA Annual Report (MoRD, New Delhi) Constitution of India, arts 14–15.

39 Ministry of Rural Development, Government of India, MGNREGA Annual Report (MoRD, New Delhi).

40 Olga Tellis v Bombay Municipal Corporation (1985) 3 SCC 545 (SC). 

41 People’s Union for Civil Liberties v Union of India (2001) 5 SCC 577 (SC). 

42 Navjyoti Co-op Group Housing Society v Union of India (1992) 4 SCC 477 

43 Chameli Singh v State of Uttar Pradesh (1996) 2 SCC 549. 

44 E P Royappa v State of Tamil Nadu (1974) 4 SCC 3. Maneka Gandhi v Union of India (1978) 1 SCC 248. 

45 Mahatma Gandhi National Rural Employment Guarantee Act, 2005  https://en.wikipedia.org/wiki/Mahatma_Gandhi_National_Rural_Employment_Guarantee_Act%2C_2005 accessed 13 January 2026 

46 R Drèze and A Khera, ‘MGNREGA: Some issues and challenges’ (The India Forum)  https://www.theindiaforum.in/article/continuing-relevance-mgnrega accessed 13 January 2026

47 Cf B Sriramulu, ‘Sriramulu defends changes to MGNREGA’ The Times of India (oubballi, 10 January 2026)  (political framing of scheme reforms) https://timesofindia.indiatimes.com/city/hubballi/sriramulu-defends changes-to-mgnrega/articleshow/126440785.cms accessed 13 January 2026 

48 Congress accuses Centre of eroding MGNREGA since 2014 The Times of India (oyderabad, 22 December  2025) https://timesofindia.indiatimes.com/city/hyderabad/cong-accuses-centre-of-eroding-mgnrega-since 2014/articleshow/126109362.cms accessed 13 January 2026 

49 Rs 355 cr MGNREGS funds siphoned off in TN in nine years The Times of India (Chennai, 13 November 2025)  https://timesofindia.indiatimes.com/city/chennai/rs-355-cr-mgnregs-funds-siphoned-off-in-tn-in-nine years/articleshow/125283367 accessed 13 January 2026 

50 Assessing the Implementation of MGNREGA (PubAdmin.Institute, 30 November 2023)  https://pubadmin.institute/social-policies-and-administration/assessing-implementation-mgnrega accessed 13 January 2026 

51 Bhumi Ram and Sapna K Sharma, Social Audit of MGNREGA: A Path of Community Participation in Tribal  Area of oimachal Pradesh (2023) International Journal of Economic, Finance and Business Statistics  https://journal.multitechpublisher.com/index.php/ijefbs/article/view/1105 accessed 13 January 2026 

52 Cf R Drèze and A Khera (n 2) (scholarly discussion on MGNREGA’s ongoing relevance and evidence‑based  impacts). 

53 Assessing the Implementation of MGNREGA (PubAdmin.Institute) (n 6) 

54 Swaraj Abhiyan v Union of India (2016) 7 SCC 498.

55 Olga Tellis v Bombay Municipal Corporation (1985) 3 SCC 545 (Supreme Court of India).