MGNREGS allocation unchanged at ₹86,000 crore

At a time when the MGNREGS, the flagship rural employment programme, is running on a deficit of ₹9,754 crore, there has been no hike in fund allocation in the 2025-26 Budget.

At a time when the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS), the flagship rural employment programme, is running on a deficit of ₹9,754 crore, there has been no hike in fund allocation in the 2025-26 Budget.

In FY 2025-26 Budget, ₹86,000 crore has been allocated for the scheme, which is same as the budget allocation for 2024-25. While the Centre insists that the MGNREGS is a demand driven scheme and additional funds are given when required, no upward revision was made in the ongoing financial year.

Therefore, Budget Estimate 2024-25, Revised Estimate 2024-25 and the Budget Estimate 2025-26 are the same at ₹86,000 crore. A significant amount of the budget each year is spent in covering the dues of the previous financial year. The pending dues of West Bengal is around ₹7,500 crore. If the issue is resolved this year, the allocated budget will further decrease.

The legislation dictates that the workers have to be paid their wages within 15-days of doing the work. But due to the allocation, the Centre will not be able to meet this deadline. 

“The ongoing financial year has another three-months to go. The programme is already running on a deficit. This means that for the next three months wages will be further delayed. Significantly, with such low allocation, the scheme will be rationed in the next FY leading to artificial suppression of demand,” Nikhil Dey, Founder Member of Mazdoor Kisan Shakti Sangathan.

The low allocation is directly related to suppression of demand. The Economic Survey had said that the employment was often unavailable when sought. The Act mandates that the worker should be provided unemployment allowance if work is not provided within 15-days of raising the demand. However, the Survey noted that the “work demanded is only reported on the portal when employment is actually provided.” Thus the real demand for the MNREGS work is never captured. 

“The government has repeatedly asserted that it is a demand-driven programme and they appropriately revise the budget to meet the demand. But if that was the case, how do they explain the fact that no additional allocation was made in 2024-25, which is unprecedented? This is reflected in the negative balances reported by most States, showing that funds are running out while demand remains unmet,” Chakradhar Buddha senior researcher at Lib Tech, a consortium of academics and activists.