Two decades later, that foundational philosophy is under systematic strain. The recent budgetary contraction of MGNREGA and the proposed replacement through the VB-G RAM G Bill, 2025 represent not merely an administrative reform, but a deeper ideological reorientation of India’s rural employment framework—away from rights, towards conditionality; away from federal responsibility, towards fiscal offloading; and away from demand-driven work, towards centrally curated programmes.
Historical Intent vs. Contemporary Drift
MGNREGA was conceived in response to chronic rural underemployment, agrarian volatility, and structural inequality between urban and rural labour markets. Its design deliberately insulated it from political discretion: work on demand, time-bound wage payments, and near-full central funding were essential to its credibility.
The contemporary trajectory signals a reversal. Successive budgetary compressions have hollowed out the scheme well before any formal legislative replacement. A sharp fall in allocations in recent years has coincided with a steep decline in persondays generated, even as rural job demand remains persistently high. This contradiction—falling employment provision amid rising distress—is not accidental. It reflects a policy choice to administratively suppress demand rather than acknowledge it.
Digital compliance requirements, particularly mandatory Aadhaar e-KYC, have further narrowed access. While framed as efficiency and transparency reforms, in practice they function as exclusionary filters, disproportionately affecting migrant workers, elderly beneficiaries, and regions with weak digital infrastructure. A right that cannot be accessed is a right only in name.
Budgetary Starvation as Policy Signal
The most telling indicator of intent lies in fiscal priorities. A demand-driven programme cannot coexist with rigid budget caps. Yet MGNREGA has increasingly been treated as a discretionary expenditure, subject to annual fiscal tightening rather than counter-cyclical expansion.
The result is predictable: fewer persondays, delayed wages, and a shrinking proportion of households able to access the full employment guarantee. This erosion undermines rural bargaining power, depresses wage floors, and indirectly subsidises low-productivity private employment by weakening the fallback option for workers.
From a macroeconomic standpoint, this is deeply short-sighted. Rural employment schemes are not mere welfare expenditures; they are instruments of demand management, social stability, and risk mitigation. Curtailing them during periods of uneven growth amplifies inequality and weakens the rural consumption base that supports domestic demand.
The VB-G RAM G Bill: Reform or Retreat?
The proposed VB-G RAM G framework is presented as a modernised, more generous alternative, with a higher nominal work guarantee. Yet the architecture tells a different story. By capping central funding and shifting a substantial fiscal burden onto states, the Centre effectively retreats from its constitutional responsibility while retaining control over programme design.
This rebalancing is neither fiscally neutral nor politically benign. Poorer states, already constrained by limited revenue capacity, will struggle to sustain employment provision at scale. The outcome will be uneven implementation, delayed wages, and regional disparities—precisely the problems MGNREGA was designed to overcome.
Equally concerning is the dilution of the demand-driven principle. Seasonal pauses, central notifications for permissible work areas, and heightened surveillance mechanisms convert a statutory right into a conditional entitlement. Employment becomes subject to administrative permission rather than worker demand, eroding the core logic of the original Act.
Federalism Under Stress
MGNREGA has long been a cornerstone of cooperative federalism, with the Centre bearing primary fiscal responsibility while states manage implementation. The proposed changes invert this balance. States are expected to finance a larger share without commensurate autonomy or assured transfers.
This fiscal dumping risks deepening Centre–state tensions, particularly in states with high rural dependency on public employment. More critically, it introduces moral hazard at the national level: the Centre gains credit for reform rhetoric while states absorb fiscal and political fallout.
Such a model weakens accountability. When wage delays occur or work dries up, responsibility becomes diffuse—precisely the opposite of what a rights-based framework demands.
Democratic Deficit and Worker Exclusion
Perhaps the most troubling aspect of the transition is the absence of meaningful consultation. A programme that affects over 260 million registered workers is being restructured without systematic engagement with workers, panchayats, or state governments.
This top-down redesign reflects a broader trend in governance—where scale and speed are prioritised over consent and deliberation. In the long run, this undermines institutional trust and weakens democratic legitimacy, especially in rural India where state presence is most acutely felt through employment programmes.
A Futuristic Outlook: What Is at Stake
Looking ahead, India faces mounting rural pressures: climate volatility, mechanisation of agriculture, shrinking farm incomes, and limited non-farm employment absorption. In such a context, dismantling or diluting a proven employment buffer is economically risky and socially destabilising.
If the VB-G RAM G framework evolves into a capped, conditional, state-dependent scheme, India risks returning to a pre-MGNREGA equilibrium—where rural workers oscillate between informal migration, low-wage casual labour, and seasonal distress.
A truly future-ready rural employment system would deepen, not dilute, the rights-based approach: integrating climate-resilient assets, expanding skill-linked public works, and strengthening fiscal commitments. What is currently unfolding, however, points toward managed retreat rather than strategic renewal.
From Guarantee to Gesture?
MGNREGA was never just about employment—it was about redefining the social contract between the Indian state and its rural citizens. The ongoing changes signal a departure from that contract. Budgetary starvation, fiscal offloading, and administrative conditionality together risk transforming a constitutional guarantee into a symbolic gesture.
In a country still grappling with structural rural inequality, this shift is not merely a policy recalibration—it is a normative choice. The question India must confront is whether rural employment remains a right, or whether it is being quietly reclassified as a privilege, contingent on fiscal convenience and administrative discretion.#MGNREGA
#RuralEmployment
#FiscalFederalism
#RightsBasedWelfare
#RuralDistress
#LabourGuarantee
#StateCapacity
#DigitalExclusion
#CentreStateRelations
#SocialProtection
No comments:
Post a Comment