MGNREGA Faces Funding Crunch as Budget Remains Stagnant at ₹86,000 Crore

NEW DELHI – The Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) is currently grappling with significant financial strain, as its budgetary allocation has remained unchanged at ₹86,000 crore for both the 2024-25 and 2025-26 fiscal years. This stagnant funding, despite rising demand and previous years' higher expenditures, has drawn sharp criticism from various quarters, leading to concerns about the scheme's efficacy and impact on rural livelihoods. The sentiment expressed in a recent tweet, stating "MNREGA is a religion and this is blasphemy," reflects the strong public reaction to the perceived weakening of the program.

Critics, including Congress MP Sonia Gandhi, have argued that the current administration has systematically undermined the scheme, which was enacted by the UPA government. Gandhi, speaking in Parliament, highlighted that the actual allocation has effectively decreased, with estimates suggesting nearly 20% of the funds will be used to clear pending dues from previous years. This shortfall has resulted in a reported ₹4,315 crore wage shortfall and a ₹5,715 crore material liability, leading to significant delays in disbursing wages to workers.

Further compounding the challenges are mandatory requirements such as the Aadhaar-based payment system (ABPS) and the National Mobile Monitoring System (NMMS). A report by LibTech India and NREGA Sangharsh Morcha indicated that over eight crore registered workers were deleted from the scheme in the past two years, partly due to issues with these techno-centric policies. These measures, implemented without adequate training, have reportedly exacerbated job losses and increased hardships for workers.

The government maintains that MGNREGA is a demand-driven scheme and additional funds are made available as needed. However, the Parliamentary Standing Committee on Rural Development and Panchayati Raj has repeatedly flagged fund shortages as a major obstacle to the scheme's smooth implementation. The committee noted that pruning funds at the Budget Estimate stage has a "cascading effect" on timely wage releases and material components, hindering the program's progress.

The ongoing financial and administrative hurdles raise questions about the future of MGNREGA, a program designed to provide guaranteed employment and financial security to millions of rural poor. Activists and academics emphasize that low budgetary allocation can lead to an artificial suppression of demand for work, undermining the scheme's core objective of poverty alleviation and rural empowerment.