By Dr. B.K. Kango
On 23 June 2026, the Communist Party of India (CPI) and the BKMU jointly organised nationwide demonstrations in all districts of the country against the abolition of the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA).
The objective of these demonstrations was not merely to raise a voice in favour of a particular scheme, but to defend the rights of crores of working people in rural India. This right had supported their lives for nearly two decades, during economic crises, natural disasters, and extraordinary situations such as the pandemic. The demonstrators made it clear that the new VBG RAM G Scheme, introduced in place of MGNREGA, not only weakens the right to rural employment but also adversely affects India’s federal structure.
The Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA), enacted by the UPA-I Government, was originally intended to address rural unemployment and to provide every rural household with the right to a dignified livelihood. It was not merely a welfare scheme; it was a legal entitlement conferred by an Act of Parliament. Under this law, whenever a rural household demanded work, the Government was legally bound to employ within the prescribed period. If the Government failed to do so, the Act also contained a provision for the payment of an unemployment allowance.
It was this feature that distinguished MGNREGA from ordinary government welfare programmes. It was not a scheme based upon the Government’s discretion or charity; rather, it was a system founded upon the legal rights of citizens. It was for this reason that MGNREGA soon became one of the most popular social security programmes in the country. The scheme provided minimum income security to crores of rural households, increased purchasing power in rural areas, generated employment for a large number of women, and accelerated local development works through the Panchayati Raj institutions. Several independent studies have also established that MGNREGA played a significant role in improving rural wages, reducing poverty, and protecting livelihoods during periods of economic distress.
After assuming office in 2014, Prime Minister Shri Narendra Modi ridiculed MGNREGA in Parliament, calling it a monument to the previous Government’s failure. History, however, soon proved how indispensable the scheme actually was. During the COVID-19 pandemic, when lakhs of migrant workers returned from the cities to their native villages, MGNREGA became the greatest source of support for their survival. At that time, private employment in rural areas had virtually disappeared. Had MGNREGA not been available during this difficult period, crores of rural families would have faced starvation and severe economic distress. The pandemic demonstrated beyond doubt that MGNREGA was not merely an employment programme but a national social security shield.
One of the most significant achievements of MGNREGA was the economic and social empowerment of rural women, particularly women belonging to Scheduled Castes, Scheduled Tribes, Other Backward Classes, and other deprived sections of society. The scheme not only provided regular, legally guaranteed employment to a large number of rural women near their villages for the first time, but also ensured that the wages earned through their labour were paid directly to them in cash. This represented a major leap and a qualitative transformation in the empowerment of women from deprived communities and of rural women in general. It increased their contribution to household income, strengthened their participation in economic decision-making, and enhanced their self-confidence and social status. In many regions, women’s participation in MGNREGA even exceeded that of men, making the programme an effective instrument for organising the rural female workforce and promoting their economic self-reliance.
On the other hand, if the guarantee of employment is weakened or made dependent upon the financial capacity of the States and limited budgetary resources, the most adverse consequences will fall upon these very poor and deprived women. For them, MGNREGA has not merely been a source of income but also the foundation for a life of dignity, social security, and economic independence.
In contrast, the present Government appears to favour arrangements that make citizens dependent upon the Government’s policy preferences rather than rights-based welfare measures. In accordance with this approach, MGNREGA has been abolished and replaced by the VBG RAM G Scheme. This change is not merely a name change; it signifies a fundamental shift in the very concept of rural employment.
The most important characteristic of MGNREGA was that it functioned as an Employment Guarantee Act. Whenever an eligible rural household demanded employment, the Government became legally obligated to provide work. The scale of employment was determined not by the Government’s budgetary estimates but by the actual demand for work generated by the rural population. In contrast, under the new VBG RAM G Scheme, employment is gradually becoming fund-driven or budget-driven. In other words, the first consideration is the amount of funds available, and employment is provided only to the extent permitted by those financial resources. Consequently, the right to employment gradually becomes dependent upon government finances and administrative discretion. This weakens the legal right of the rural poor and undermines the very objective for which an employment guarantee law was enacted.
Another serious weakness of the new arrangement lies in its financial structure. Under MGNREGA, as enacted by the UPA-I Government, the States’ financial contribution was relatively limited, while the Central Government bore the majority of the expenditure. As a result, implementing the programme was financially viable for almost all States. In contrast, under the VBG RAM G Scheme, the States have been required to bear nearly 40 per cent of the total expenditure. This is not merely a change in financial accounting; it has direct implications for India’s federal structure. In a country like India, not all States possess the same financial capacity. For economically weaker States, bearing such a substantial share of expenditure will be extremely difficult.
It is for this very reason that, at the very initial stage of implementation, several States have already begun citing financial constraints. Significantly, even some BJP-ruled States have indicated that, because of the additional financial burden, they may not be able to implement the scheme effectively. Although these States are not openly opposing the programme, their attempts to distance themselves from it by pleading inadequate financial resources amount, in effect, to an indirect expression of opposition to the law itself. This situation clearly demonstrates that if the very structure of a scheme is impractical for the States, its effective implementation cannot be sustained.
Thus, the greatest weakness of the VBG RAM G Scheme is that it has linked the guarantee of employment to the States’ financial capacity. If a State lacks adequate resources, the process of providing employment will inevitably be affected. Consequently, citizens in different States will no longer enjoy equal access to the same legal rights. This runs contrary not only to the federal spirit of the Indian Constitution but also to the constitutional principle of equality of opportunity. The success of any rights-based legislation depends upon stable, adequate, and assured financial support. Once the financial foundation itself becomes uncertain, the legal right gradually risks being reduced to little more than a provision on paper.
It was these fundamental issues that the CPI and the BKMU highlighted through their nationwide demonstrations. They asserted that abolishing a rights-based framework such as MGNREGA runs counter to the interests of the rural poor. They demanded that the shortcomings of the new arrangement be rectified, that the additional financial burden imposed upon the States be withdrawn, and that MGNREGA be restored so that rural employment is once again guaranteed as a legal right. They further argued that if the Government is genuinely committed to rural development and employment generation, it must adopt a framework in which the availability of work is guaranteed as a legal right of every citizen, rather than being contingent on government grants or budgetary limitations.
Today, there is an urgent need to view rural employment not merely as an issue of economic policy, but as a question of social justice, human dignity, and constitutional responsibility. MGNREGA demonstrated that a rights-based law can provide stability and security to society during periods of crisis. In contrast, if the provision of employment is contingent on the financial positions of individual States and on restricted budgetary allocations, the programme’s scope will inevitably shrink over time and ultimately fail to fulfil its original purpose.
The replacement of a demand-driven employment guarantee with a fund-driven scheme marks a fundamental departure from the philosophy that underpinned MGNREGA. Under the earlier law, the demand for employment determined the allocation of resources, making the Government legally accountable to the people. Under the new arrangement, however, the availability of funds determines the extent of employment that can be provided. Such a reversal transforms a legally enforceable right into a programme dependent upon financial availability and administrative discretion. This shift weakens the security of rural workers and erodes the guarantee that formed the very foundation of the earlier legislation.
Equally serious is the scheme’s growing dependence on the States’ financial capacity. Since the new law requires States to bear nearly 40 per cent of the expenditure, financially weaker States will inevitably find it difficult to sustain the programme. The consequences of this structural change are already becoming visible. Several States have begun expressing concerns over the heavy financial burden, and significantly, even several BJP-ruled States are attempting to distance themselves from the scheme by citing inadequate financial resources. Although this may not constitute explicit political opposition, it represents an indirect acknowledgement that the new law’s financial design is impractical and unsustainable. A law whose implementation depends upon the unequal financial strength of different States cannot ensure equal rights for all rural citizens and, in the long run, risks becoming ineffective.
For these reasons, it is imperative that the provisions which weaken the guarantee of rural employment be reconsidered and that a system be restored which genuinely secures the right to work for every rural citizen. This remains the central message of the nationwide movement launched by the CPI and the BKMU. (IPA Service)
