THE Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) was perhaps the most consequential legislation enacted in post-independence India. It did not just provide for a transfer towards the poor; it did not just set up a scheme of employment creation like the earlier “Food for Work” programmes had done; it recognized, no matter in how limited a form, a right to employment. Under the MGNREGA employment up to a maximum of 100 days per household had to be provided on demand. It set up accordingly the largest employment generation programme in the world, one that provided significant succour to hard-pressed rural households.

Even though this right was not Constitutionally recognized, the Act enshrining it was passed by parliament after considerable debate and discussion, not just within parliament but also between parliamentarians and society at large, including academic economists, public intellectuals, workers’ representatives and civil society organizations; and it was passed unanimously which conferred upon it the status of a quasi-Constitutional assurance. There had of course been dissenting voices at the time even within the United Progressive Alliance government, but pressure from the Left that was supporting that government from outside, had eventually won the day, and all parties had fallen in line, including even the BJP.

The Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) that came into being because of the Act, provided a life-line not just to the rural but even to the urban poor, as was evident during the pandemic when the latter were forced to go back to their villages in large numbers and were helped by the employment they got under this scheme. It altered the balance of class-strengths in society, no matter in how limited a measure. It was not just that the landed rich felt threatened by a possible upward thrust to wages; it was also the question of a loss of social control over the labouring poor, the fear that the poor could now get “out of hand”. This class opposition to the MGNREGS crystallized around the BJP, which had by then come to power and was confident enough to reveal its class bias, camouflaging this bias, as usual, under a concern for “development”: the argument was advanced that precious resources that could be utilized for “development” were being frittered away under this scheme which was riddled with corruption. In the case of the BJP moreover its opposition to the MGNREGS arising from class bias was reinforced by the fact that fascistic outfits such as the BJP are invariably opposed to the people having any rights: they emphasize duties not rights.

The result was a replacement of the MGNREGA by a new Act, whose passage was almost a sleight-of-hand: it was hurriedly introduced, barely discussed in parliament, and passed quickly by a voice vote; and it is to become operational from July 1. The new Act brought in several changes, the most significant one being that the expenditure under the earlier scheme which had been borne between the Centre and the states in the ratio of 90:10 was now to be borne in the ratio of 60:40 (except in the case of “special category states”). This change was unilaterally decided by the Centre, without consulting the state governments. The state governments are starved of fiscal resources under the current neo-liberal dispensation of which an important component is the Goods and Services Tax that has replaced the Sales Tax levied earlier by the states according to their own discretion. Forcing them to share the burden to the tune of 40 percent amounts in effect to starving the scheme of funds and putting the blame for it on the states.

It also appeared from the new Act (VBGRGA) that the universal coverage of the MGNREGA was being abandoned, as well as its demand-driven nature which had amounted to conferring a right since the new scheme was to become operational only in notified rural areas (though in such areas the maximum number of days of employment was going to be raised to 125 from the earlier 100). The central government spokespersons however have denied this. They have claimed shortly after the new Act was passed that the universal coverage of the MGNREGA and its demand-driven nature would remain unimpaired even as the number of days of employment would be increased to 125 from the earlier 100.

But what the new Act does or does not provide becomes irrelevant in view of the manner in which the old scheme is being operated now, which amounts to nothing less than whittling it down; and this is evident from the report on it for 2025-26 prepared by LibTech India, a consortium of academics and activists.

Their report states that the number of households employed under the MGNREGS declined by 8.2 percent in 2025-26 compared to 2024-25, and the number of workers employed declined by 9.1 percent. The number of person-days of work generated fell even more sharply, by as much as 21.5 percent, which means that the average number of days of work made available to a worker employed under MGNREGS fell significantly. In terms of overall magnitudes, compared to 268.44 crore person-days of work made available under the MGNREGS in 2024-25, only 210.73 crore person-days were made available in 2025-26. LibTech estimates that if the average person-days per household in 2025-26 had remained the same as in 2024-25, each household would have earned Rs.1938 more in 2025-26; this in other words is the magnitude of income loss owing to the whittling down of the MGNREGS.

Lest it is thought that 2024-25 had been an unusual year, so that comparisons with it lack much significance, it is worth going back a little. It is worth remembering that in 2019-20, just before the onset of the pandemic, 265.35 crores of person-days of employment had been generated under the MGNREGS. The fall in 2025-26 in other words is significant relative not jut to 2024-25 but to the pre-pandemic “norm”.

Some have attributed this fall in 2025-26 to a reduction in the demand for work, which in turn is attributed to a fall in the magnitude of poverty in the Indian countryside. But this is an utterly absurd argument. Not only is the claimed decline in poverty a mere figment of imagination, but even the number of households registered for employment under the MGNREGS actually went up in 2025-26 by 3.2 percent from 14.98 crores in 2024-25 to 15.46 crores. People would hardly be registering in larger numbers for work if they were less interested in finding employment.

Among the reasons for the fall in employment, two in particular stand out. One is the 5 percent cut in the budgetary allocation for MGNREGS, which, combined with wage arrears from the past of Rs.10,000 crores that had to be paid first, meant a financial squeeze on the scheme; and this translated itself to a provision of reduced employment. There was in short a wilful abrogation of the rights-based demand-driven nature of the MGNREGS by making less funds available for it. If wages are not paid on time during any given year because funds earmarked for the scheme are insufficient, or are used to pay wage arrears, then the demand for work itself remains unmet, or even gets curtailed, during the year. The availability of finance then becomes the effective constraint, as indeed it has become.

The second reason is the introduction of technological changes in procedure in the name of avoiding “corruption”, which mean a de facto exclusion of large numbers of workers. Mandatory Aadhar-based payment, and online attendance mean that vast numbers of workers who cannot complete their eKYC are excluded.

We have here a phenomenon similar to the Special Intensive Revision of electoral rolls that excluded several million voters in the recently concluded West Bengal elections. Just as in the latter case, in the name of keeping “infiltrators” out of electoral rolls, there is a resort to technology that results in a mass denial of the voting right to citizens, in the MGNREGS case too in the name of eliminating “corruption” there is a resort to technology that denies what had been deemed as a right to vast numbers of the labouring poor. The BJP government (as whose arm the Election Commission of India has been functioning) has mastered the technique of using technology to snatch away people’s rights, which must be a novel innovation.

Given the pattern of financing between the Centre and the states visualized in the VBGRGA, which the states will find difficult to comply with, and given the technological onslaught on the labouring poor in the name of fighting “corruption”, whether the new Act provides for universal coverage, whether it provides for 125 days instead of 100 days, become irrelevant quibbles. The plain fact is that the MGNREGS is being dismantled.