India has dismantled one of the world’s largest rights-based public employment programmes and replaced it with a fundamentally different framework. The Viksit Bharat–Guarantee for Rozgar and Ajeevika Mission (Gramin) Act, 2025 has formally repealed the Mahatma Gandhi National Rural Employment Guarantee Act, a law that, for two decades, guaranteed rural citizens a legally enforceable right to employment. This shift matters not only for rural livelihoods but also for the future of India’s rights-based welfare architecture.
From Demand-Driven Right to Supply-Driven Scheme
Enacted in 2005 as NREGA and later renamed MGNREGA, the law created a demand-driven system: any rural household seeking work was legally entitled to up to 100 days of employment, failing which compensation was payable. The 2025 Act inverts this principle. Employment is no longer a right triggered by citizen demand but a supply-driven programme whose scale, geography, and funding are determined by the Union government. This marks a structural break from the idea of enforceable social entitlements.
An Ideological and Symbolic Recasting
The removal of Mahatma Gandhi’s name and the rebranding of the programme signal more than administrative change. Gandhi’s association had grounded the right to work in a moral vision of dignity, justice, and state responsibility towards the poorest. Its erasure reflects a deliberate ideological departure. As Jean Drèze, one of the programme’s principal architects, has argued, these changes hollow out both the legal force and ethical foundations of the original law, amounting to an effective dismantling rather than reform.
Fiscal Rebalancing and Federal Strain
A key change under the new law is the altered funding structure. Under MGNREGA, the Centre bore the full wage cost and over 90% of total expenditure, giving States strong incentives to implement the programme. The VB-G RAM G Act shifts this ratio to 60:40 between the Centre and States. For fiscally weaker States, this added burden is likely to constrain project approvals and suppress demand for work, undermining the scheme’s reach. Devolution without adequate fiscal support raises serious questions about federal balance and programme viability.
Why MGNREGA Emerged in the First Place
MGNREGA was born out of the contradictions of post-liberalisation India — high growth alongside agrarian distress, jobless growth, and widening inequalities. When the United Progressive Alliance came to power in 2004, rural distress had intensified, exposing the limits of market-led development in generating employment and social protection. Alongside the Right to Information Act and the Forest Rights Act, MGNREGA represented a rights-based response that sought to temper growth with enforceable social guarantees.
More Than Welfare: A Democratic Innovation
Unlike targeted schemes addressing specific deprivations, MGNREGA tackled the foundational issue of livelihoods. Employment was treated as the most dignified form of social protection in an economy dominated by informal labour. Its universality, social audits, grievance redressal mechanisms, and compensation for delayed wages transformed it into an institutional channel through which citizens could assert claims on the state. Empirical evidence over the years showed gains in rural wages, consumption smoothing, and local asset creation, challenging narratives of inefficiency.
Political Economy of the Rollback
Over the past decade, the consolidation of power under the Bharatiya Janata Party has coincided with a broader retreat from rights-based welfare. Critics of MGNREGA — including sections of corporate capital and market-oriented commentators — long framed it as fiscally reckless. The repeal signals an ideological realignment that privileges discretionary executive welfare over legally enforceable entitlements, transforming social protection into an instrument of state benevolence rather than citizen right.
Contrasting Legislative Pathways
MGNREGA was enacted with near-unanimous parliamentary support, reflecting rare cross-party consensus. In contrast, the VB-G RAM G Bill was passed swiftly amid Opposition walkouts, without referral to a Parliamentary Standing Committee and with minimal public consultation. The speed of its passage, and the absence of deliberation, underscore the sharp political rupture between the two legislative moments.
What to note for Prelims?
- MGNREGA was a demand-driven, rights-based employment law.
- VB-G RAM G Act, 2025 shifts to a supply-driven framework.
- Centre–State funding ratio changed from 90:10 to 60:40.
What to note for Mains?
- Critically examine the implications of replacing rights-based welfare with discretionary schemes.
- Discuss the federal and fiscal consequences of altering Centre–State cost sharing in social programmes.
- Evaluate how employment guarantees shape democratic accountability and citizen–state relations.
At stake is not merely the future of a single employment programme, but a foundational principle of India’s democracy: whether dignity through work remains a matter of right, or becomes contingent on executive discretion and fiscal convenience.
