Two decades of MGNREGS lifted rural families fear progress slipping amid budget cuts

Hubballi: In Raichur’s Maski taluk, 51-year-old Bhimavva has seen the transformative impact of Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) on rural lives since its launch in 2005. Over the past two decades, she has worked under the scheme, first as a worker and later as a worksite supervisor. Maski, one of Karnataka’s most backward taluks, once saw an exodus of families between February and July, as they boarded overcrowded trains to Hyderabad, Chennai and other cities in search of work. She says 30% to 40% of families have stopped migrating now.

“In the early 2000s, when we migrated to Goa, we faced humiliation and insults from the locals,” she recalls. 

Bhimavva cultivates jowar and cotton on her three acres land. With the income that she earned from MGNREGS work, she built a cattle shed, which helped double her household income over seven years. This additional source of livelihood has given her a financial stability that seasonal migration never could.

As a supervisor, she has seen her fellow villagers build farm ponds, level fields and improve village roads.

In Belagavi’s Lingamath village, MGNREGS worksite supervisor Parashuram Nayak, also called a mate, says that guaranteed employment has enabled rural households to stabilise their incomes, keep children in school, access better healthcare and build durable assets. Various studies on the scheme reinforce these positive outcomes.

“MGNREGS gave people the confidence to stay in their villages,” he says.

Introduced in 2005, MGNREGS has reshaped lives and livelihoods across rural India by ensuring up to 100 days of unskilled wage employment to a household each year, within five kilometres of the worker’s home. Over the past two decades, it has reduced distress migration, strengthened income security and generated 9.44 crore long-term rural assets nationwide. This includes community assets like desilted lakes, kaccha roads and village drains to personal assets like toilets for Ashraya houses, farm ponds, bunds, approach roads and cattle sheds. Karnataka alone has generated 72.25 lakh assets in 20 years.

However, as MGNREGS faces budget cuts and implementation challenges, several workers and facilitators fear that the gains could begin to slip away. Both government data and village narratives reflect signs of this erosion.

Budget cut

The budget approved by the Union government for labour has fallen from Rs 385.67 crore in 2020–21 to Rs 198.89 crore in 2025–26, a cut of nearly 48%. With less money, the average number of workdays per household in Karnataka has also dropped from 51.52 days in 2020-21 to 50.24 days in 2024-25, falling far short of the Act’s promise of 100 days. The national average is 52 days.

“Parliament passed MGNREGS as an Act and the Constitution recognises it under the Directive Principles, giving rural households a legal right to work. Yet, the Union government has been trying to undermine it by cutting funds and imposing conditions that are difficult for unskilled labourers in remote villages to meet,” says Abhay Kumar, a Raichur-based social activist.

The MGNREG Act is demand-driven, any rural household willing to perform unskilled manual labour can request work, which must be provided up to the 100-day annual limit. Yet only 7.4% of households with job cards have completed the full 100 days nationally. There is no clear data on how many households sought the full 100-day entitlement.

Retired IAS officer Sanjiv Kumar, who headed the State Rural Development and Panchayat Raj Department and has conducted multiple studies on MGNREGS, notes that executing the scheme on the ground is becoming increasingly challenging. “There should be a continuous flow of funds from the Centre to the state and then to the gram panchayats. But this rarely happens on time. In its current format, labourers are often left without work and face delays in wage disbursement, forcing them to leave the scheme and seek alternative employment,” he says. 

A 2024 study, Performance Analysis of MGNREGA in Karnataka, highlighted that the average days of employment provided per household is only half of the programme’s prescribed limit. Gunabhagya, a former research fellow at the Karnataka government’s Fiscal Policy Institute, who conducted the study, highlights another problem: “In Karnataka, funds are distributed equally among districts. Belagavi, Gadag, Koppal, Raichur, Bagalkot, Yadgir and Bidar districts that have consistently performed well receive the same funding as poorly performing districts such as Bengaluru, Mysuru, Tumakuru, Kalaburagi, Dharwad, Dakshina Kannada and Uttara Kannada,” she says. Currently, there is no mechanism to allocate funds based on actual work demand or completion. Urban districts and areas near Bengaluru perform poorly because many labourers migrate to the capital city seeking better pay. 

The study also noted that a significant portion of the funds is spent on administrative and material costs rather than on wages.

Another challenge is the lack of preparation of annual work plans by gram panchayats. “There is more demand for work in the arid and drought-prone areas of North Karnataka. However, the shortage of skilled staff at the gram panchayats to prepare work plans and get approvals for these projects results in many beneficiaries not getting work,” says Sanjiv Kumar.

Work saturation

At the same time, several villages have exhausted the works available within their gram panchayat limits. Government departments have stopped proposing new works, citing “target completion,” even as rural needs remain unfulfilled.

Lingamath gram panchayat, for instance, has completed all permissible works, from lake rejuvenation to farm bunding but has no new projects approved. “Our village has almost completed all the works under rural development schemes. But with erratic payments for the work taken up earlier and no fresh work available, men in the village have resumed migrating to Goa and Maharashtra,” says Parashuram. During peak work months, villagers used to earn around Rs 2,700 a week but the window for such work is shrinking rapidly. 

Sharada Gopal, who is facilitating MGNREGS work in Belagavi’s Khanapur taluk, points out that currently only the Rural Development Department is allocating work. “Other departments have neither recognised nor leveraged the potential of unskilled rural labour. Without innovation in the types of work offered, the potential of MGNREGS will remain limited,” she says.

She added that many departments refrain from initiating projects because the Union government does not allocate funds for them. As a result, labourers are forced to migrate, undermining the scheme’s purpose. 

Vani B P, faculty at the Institute for Social and Economic Change, Bengaluru echoes the need for innovation. “There are opportunities in rural areas where the government could provide employment for labourers for more than 200 days. Beyond long-term engagement, the scheme should offer training so workers can be employed in rural small-scale industries. Work should also be planned to account for gender and age,” she said.

While the Rural Development Department is the nodal office, other departments and ministries can undertake more than 266 permissible activities under MGNREGS. However, only a few departments have actively allocated work. She adds that contractors sometimes misuse job cards by deploying machines to complete work.

Gunabhagya stresses that to make the scheme truly successful, work must be allocated to the districts where it is most needed. 

Digital hurdles

With an aim to streamline processes and bring transparency, the Union government introduced some technology-based solutions between 2017 and 2022. They include the Aadhaar-based Payment System (ABPS), National Mobile Monitoring System (NMMS) app and GeoMGNREGA for geo-tagged work verification. But on the ground, they have compounded the problems. 

Some workers are unable to link Aadhaar with bank accounts and job cards, while in many cases poor internet connection prevents attendance on NMMS, causing delays in payments.

Swarna Bhat, an activist who has worked extensively for the rights of MGNREGS workers, notes, “Without adequate internet infrastructure, digitally inexperienced workers are forced to navigate advanced technology.” She adds that corruption persists and machines are still used unofficially, pushing workers, especially women, out of the scheme.

Women constitute nearly 54% of the MGNREGS workforce. Many people continue to prefer MGNREGS despite other sectors offering higher wages, valuing the financial stability it offers without requiring migration. In 2025–26 (till October), nearly 4.53 crore households in the country received supplementary income with wages ranging from Rs 294 to Rs 357 per day. Women comprised 53.5% of active cardholders. In Karnataka, women’s participation is at 54.7%.

“Unlike construction and agriculture, MGNREGS pays men and women equally. Thanks to the scheme, my family has settled here, receiving 100 days of work over the past three years. Now only men migrate for work,” said Sushila Vaddar of Bidi village in Belagavi district. 

A recent study, Inclusion of Vulnerable Sections in MGNREGA of Karnataka, found that nearly 60% of beneficiaries received timely livelihood support when they needed it most. It also highlighted that 99% of women who began receiving equal wages became financially independent and more involved in household decision-making.

However, Ananya Samajdar, Deputy Director-Research at the Grassroots Research and Advocacy Movement (GRAAM), Bengaluru, who led the study, points out several loopholes in the auditing of the projects. Social audits ensure accountability, transparency and effective implementation while empowering workers to actively participate in project planning and execution. In Karnataka, grievance meetings, which are part of social auditing, have not been held for many years in several gram panchayats.

Gunabhagya adds that without a social audit, it is difficult to understand whether the assets created have genuinely benefited the community or individuals. “We would not know if the demand for these works originated from the gram panchayats or were simply imposed by the department officials,” she says. She points out that MGNREGS must address each village’s specific demands and fund allocation should be managed at a micro-level.

“Zilla panchayat CEOs, already handling multiple responsibilities, are tasked with overseeing project implementation and audits. Technology, while intended to enhance transparency, has made the scheme more cumbersome,” notes Sanjiv Kumar.

Sustainable projects

Meanwhile, since 2014, the Modi government has signaled a gradual scaling back of the scheme. In 2019, then union agriculture minister Narendra Singh Tomar stated in the Parliament: “The government is not interested in continuing the scheme as MGNREGS’ target group is the rural poor, while the Modi government’s larger goal is to eliminate poverty altogether.”

However, activists point out that despite being in power for over 11 years, the government has not dismantled the scheme.

“MGNREGS has become a vital lifeline for rural households. This was evident during the Covid-19 pandemic when returning migrant labourers got work opportunities under the scheme. No political party can withdraw it easily,” says Abhay.

He adds that instead of treating it as a matter of political ego, the government should strengthen the scheme to provide long-term rural employment and promote sustainable projects.

“If the government chooses, it can increase the guarantee to 150 workdays per family. There would still be a shortage of resources to significantly improve living standards in villages,” he notes.

Having spent her childhood at brick kilns and construction sites as her parents migrated to cities for work, 32-year-old Dakshayini Vaddar has now settled in her village in Belagavi district after her family secured work under MGNREGS. She puts it simply: “We finally got a life of dignity. We only hope it lasts.”