THE Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA), India’s most significant rights-based rural employment programme, has long served as a lifeline for the rural poor. This law guarantees every rural household 100 days of statutory employment annually. However, the Bharatiya Janata Party (BJP)-led government has effectively dismantled MGNREGA, pushing the lives of rural workers into a vortex of uncertainty.

As is widely understood, due to the introduction of normative allocations, the scheme in principle ceases to remain demand-driven and instead becomes akin to a traditional centrally sponsored scheme tied to budgetary provisions. This shift is expected to impose a significant financial burden on state governments, with the cost-sharing ratio between the Centre and states fixed at 60:40, except for northeastern states. In practice, MGNREGA earlier operated with a ratio closer to 90:10. The current framework also lacks any provision for periodic wage revision or indexation. Furthermore, it allows for a suspension of work for up to 60 days during peak agricultural seasons. The universality of the programme is weakened by provisions that restrict its implementation to notified areas, without clear guidelines regarding the inclusion or exclusion of other regions. This effectively strips agricultural workers and rural workers of their legally guaranteed “right to work,” thereby increasing uncertainty in their livelihoods.

In a move that has drawn criticism, the Centre passed the VB-Gram (G) scheme in Parliament without any prior consultation, effectively replacing the demand-driven “right to work” framework of the MGNREGA, under which providing funds based on demand was a statutory obligation of the Union government. At the same time, observers point out that even for the new scheme, budgetary allocation in Parliament has been inadequate, reinforcing concerns that the government is neither serious about the welfare of rural labourers nor sufficiently attentive to the needs of the rural economy.

Under the Union Budget, ₹95,000 crore has been allocated for the VB-Gram (G) scheme for 2026–27. Experts argue that this amount is insufficient, and further ambiguity persists over whether state-wise normative allocations have been clearly informed. This lack of clarity is particularly concerning because most states had already finalised their budgets before their respective shares were determined. As a result, the distribution of funds appears opaque and somewhat arbitrary. States are now required to contribute 40% of the funding, yet they remain uncertain about the quantum of financial support they will receive from the Centre. This uncertainty has made it difficult for them to finalise their own contributions, thereby complicating the implementation of the scheme.

Workers appear to be the worst affected in this entire process. Although annual revisions in wage rates under MGNREGA have historically been insufficient, notifications announcing revised wages are typically issued in March each year. In 2024 and 2025, such notifications were released on March 27. Similarly, the government issued revised wage notifications on March 24 in 2023, March 28 in 2022, March 15 in 2021, and March 24 in 2020. These revised wage rates usually come into effect from April 1 of each financial year. However, in an unprecedented development in nearly a decade, wage rates under MGNREGA have not been notified before the start of the current financial year, raising further concerns about delays and uncertainty in wage payments.

A deep sense of uncertainty has gripped rural workers across the country, with many reporting that they are unable to secure employment despite actively demanding work. Labourers say they are being turned away by officials, who are clearly stating that no work will be provided under the MGNREGA. This has led to growing confusion about whether employment will instead be available under the newly introduced VB-Gram (G) framework. Notably, even senior state officials appear to lack clarity on this. Following the discontinuation of MGNREGA, the new system was expected to come into force from April 1. However, while the government moved swiftly to pass the law, the rules governing its implementation are yet to be framed. As a result, in April 2026, rural workers found themselves in a legal vacuum, deprived of the statutory right to demand work under MGNREGA, while also lacking an operational framework under VB-Gram (G). This effectively leaves them without any enforceable right to employment, and various news reports suggest that officials have been instructed not to provide work under the previous scheme.

Although major national media outlets have largely refrained from highlighting the issue, local newspapers continue to report extensively on the distress faced by MGNREGA workers. According to Down To Earth, as of April 15, 2026, only 95 lakhs person-days of work had been generated under MGNREGA, just 4% of the figure recorded in April 2025. In comparison, 2.6 crore person-days had been created during the same period in 2025. Additionally, in the final quarter of the 2025–26 financial year, after the passage of the VB-GRAMG Act, only 2.1 crore person-days were generated nationwide, marking a 31% decline compared to the same period in 2024–25. The lack of clarity surrounding the status of MGNREGA has also resulted in significant delays in wage payments. Since the passage of the new law in Parliament on January 21, 2026, wage payments have reportedly been stalled across nearly all states, with approximately ₹10,000 crore in wages remaining pending.

Another major concern relates to the fate of ongoing and incomplete works under MGNREGA. Although the current budget has earmarked ₹30,000 crore for the scheme, there is little clarity at the ground level regarding its utilization. Observers note that the allocation itself is inadequate, as a substantial portion is likely to be consumed by clearing past liabilities. Furthermore, officials have reportedly halted most ongoing work. While senior officials from the Ministry of Rural Development have publicly stated that existing projects under MGNREGA will be allowed to continue until completion before transitioning to the new programme, reports from the field suggest otherwise. Workers are not receiving employment, and even local administrators appear uncertain about implementation. For instance, in Uttar Pradesh alone, 1,227,670 works under MGNREGA remain incomplete. Additionally, there are outstanding material liabilities of nearly ₹4,000 crore in the state, with payments pending, further contributing to the suspension and delay of projects.

The government’s approach to rural employment can be gauged from the deteriorating implementation of the MGNREGA during 2025-26. According to the latest MGNREGA tracker released by Delhi-based LibTech India for Andhra Pradesh, total person-days of work declined by 23.2% year-on-year, falling from 2,422.84 lakh to 1,859.77 lakh. The contraction was broad-based: the number of registered households dropped by 6.1%, households that received work declined by 8.6%, the total number of workers fell by 10.1%, and the average number of workdays per household decreased by 16%. Most strikingly, the number of households completing the full 100 days of employment saw a steep decline of 57.6%, falling from 5.1 lakh to 2.16 lakh. Consequently, the proportion of such households nearly halved, dropping from 10.9% to just 5%. Quarterly data further indicates that the contraction had begun well before the scheme’s discontinuation, but accelerated sharply in the final quarter (January–March 2026), coinciding with the transition to the new VB-Gram (G) framework.

At the all-India level, a similar trend is evident. Compared to the financial year 2024-25, employment generation under MGNREGA declined significantly in 2025-26. The total number of person-days generated fell from 286.16 crore in 2024–25 to 228.19 crore in 2025-26, indicating that demand for work was not adequately met. A key indicator of the scheme’s effectiveness is the average number of employment days per household which has also declined from 50.24 days in 2024–25 to 43.2 days in 2025–26. This drop suggests that rural households are receiving less work than before, directly impacting their incomes. While the core objective of MGNREGA is to ensure 100 days of employment, the number of households achieving this benchmark fell sharply from 40.69 lakh in 2024-25 to just 23.43 lakh in 2025-26, a decline of nearly 40%. This points to a weakening of the scheme’s legal guarantee in practice.

The overall reach of MGNREGA has also contracted over the past year. The number of participating households declined from 5.78 crore to 5.34 crore, while the number of active workers fell from 7.88 crore to 7.2 crore. These figures suggest that policy changes have already begun to shrink the scheme’s coverage, even as rural unemployment and economic distress persist. MGNREGA also aims to provide employment to marginalised communities, but participation among Scheduled Castes (SCs) declined from 18.63% in 2024–25 to 16.8% in 2025–26. Similarly, women’s participation saw a slight dip, from 58.08% of the total workforce in 2024–25 to 57.25% in 2025–26. Overall, the comparison clearly shows that MGNREGA’s performance in 2025–26 was weaker than in the previous year, with administrative hurdles and technical challenges, such as mandatory online attendance, emerging as barriers to effective implementation.

In conclusion, it is evident that weakening or dismantling a rights-based law like the MGNREGA has had serious repercussions on rural livelihoods across India. The new VB-GRAM (G) framework neither provides a legal guarantee of employment nor appears capable of delivering work in response to demand. Budgetary constraints, policy ambiguity, and administrative disarray have further exacerbated the vulnerability of rural workers. At a time when the rural economy is already under stress, there is a growing need for the government to restore the legal right to work, ensure adequate budgetary support, and design policies that can provide stable and dignified livelihoods to labourers.

Meanwhile, agricultural workers organisations and the NREGA Sangharsh Morcha have called for a nationwide strike on May 15, demanding the immediate withdrawal of the VB-Gram (G) law and the reinstatement of a strengthened MGNREGA framework. Their demands include guaranteeing at least 200 days of employment for every rural household and setting a minimum wage of ₹700 per day, with provisions for annual revisions in line with inflation.