The Bharatiya Janata Party-led National Democratic Alliance government will present the second full budget of its third successive term in office, amidst concerns of a slowdown of the economy based on government estimates.

The Mahatma Gandhi National Rural Employment Guarantee Scheme, the rural jobs programme which guarantees 100 days of work per household and constitutes 47 percent of the Department of Rural Development’s budget, will continue to be significant in providing employment to poor rural households.

IndiaSpend had reported before the 2024 general election how multiple parliamentary reports had cautioned about the inadequacy of funds despite evidence of high demand for work in the programme. In December 2024, hundreds of MGNREGS workers protested in Delhi on various issues including delayed wages, deletion of job cards, and the inadequate allocation of funds by the Union government.

MGNREGS, which has 134 million active workers, had absorbed a large population of migrant workers who had returned home during the Covid pandemic, following lockdown restrictions and job loss. The scheme’s inadequate budgets, low and delayed wage disbursement have been consistent issues raised by workers and activists.

Few households work 100 days annually

Over the years, there has been demand for increasing the guaranteed number of days from 100 to 150 days, particularly in the aftermath of the pandemic which impacted migrants who mostly work in the informal sector. The government has said that MGNREGS is a “fall back option for livelihood for the rural households, when no better employment opportunity is available”.

The programme makes provisions for an additional 50 work days for every Scheduled Tribe household in a forest area, provided these households have no other private property except for the land rights provided under the Forest Rights Act, 2006. In addition to this, there is a provision for providing an additional 50 days of wage employment in a financial year in areas hit by drought or other natural calamities. The state governments are also free to increase the number of work days by using their own funds, the government said in a parliamentary response.

In actual fact, few workers were able to avail 100 days of work. According to government data, since 2018-19, 7.4 percent of the households, on average, that had availed jobs under the programme completed 100 days. In 2023-24, a MGNREGS household, on average, worked 52 days, which was the highest reported since 2012-13.

The December 2024 Lok Sabha Committee’s Action Taken report on recommendations contained in the 37th report, suggested that the number of days be increased to 150 days from the present 100 days.

“Although the State Governments may make provisions for additional days, still the Committee are of the firm opinion that the mandatory increase in number of guaranteed days should be brought about by the DoRD by moving an amendment in the Act in order to make it applicable for the entire country, so that the demand of needy beneficiaries may not hinge upon the arbitrariness of the State Governments,” the report said.

Economist Jean Drèze told IndiaSpend that far more important than increasing guaranteed days of work was to raise MGNREGA wage rates. “Increasing the guaranteed minimum from 100 to 150 days would benefit a small minority of workers who are already working 100 days. Increasing wage rates would benefit all workers, and help to revive their enthusiasm for this programme.”

Data show that in 2024-25, more than 600,000 households attended work for 101-150 days, where 50 percent of households were reported in Maharashtra and Chhattisgarh.

“In the current circumstances, increasing guaranteed workdays from 100 to 150 is not feasible without addressing complementary needs such as increasing the budget, deploying more personnel on the ground, and granting panchayats the autonomy to identify works under MGNREGS,” said Chakradhar Buddha, senior researcher at LibTech India.

IndiaSpend has written to senior officials in the rural development ministry for their comments on increasing the number of guaranteed work days, budgets and wages, and women’s participation. We will update this story when we receive a response.

Budget and wages

This financial year, the Union government allocated Rs 86,000 crore for the programme. While the government claimed that this was the highest budget announced for the scheme, it was equal to the revised estimate for 2023-24 and five percent lower than actual expenditure in 2022-23.

As of January 27, 82.4 million people had demanded MGNREGA work in 2024-25. This is expected to increase by the end of the financial year in March. The previous financial year (2023-24) was the first since the 2020 Covid pandemic when demand for work fell to pre-pandemic levels. For each of the three financial years before that--2020-21 to 2022-23--more than 100 million people had demanded work, indicating issues in finding employment since the pandemic.

In a pre-election analysis of MGNREGS, IndiaSpend reported that Lok Sabha standing committee reports found the lower-than-expected budgetary allocations “perplexing” and “puzzling” despite evidence of high demand for work. Data as on January 27 show that Rs 11,423 crore ($1.3 billion) are due to states including for wages, administrative expenditure and material costs in 2024-25.

The December 2024 Lok Sabha standing committee report highlighted the wages paid under the MGNREGS since 2008 to be “inadequate and not in consonance with the rising cost of living”. The committee noted that it had “time and again urged DoRD to increase the wage rates under MGNREGA by linking it with an index commensurate with national inflation. But the wage rates under MGNREGA continue to remain stagnant on account of no change in indexation.”

The highest MGNREGS daily wage rate notified for 2024-25 was Rs 374 in Haryana and in three panchayats in Sikkim, which was Rs 1 lower than national minimum wage recommended in 2019 by the Anoop Satpathy committee appointed to review and recommend methodology for fixation of national minimum wage, IndiaSpend had reported.

Compared to the 2023-24 agricultural labour wage rate for men for 19 states and Union Territories, the MGNREGS wages for 2024 were, with the exception of Gujarat and Madhya Pradesh, lower for each state. In Kerala, agricultural labour daily wages were higher by Rs 461.

“MGNREGA has actually been linked with the price index for many years. They are raised every year along with the price level, but not more than that,” said Drèze. “In other words, MGNREGA wages have been stagnating in real terms. When the scheme was launched in 2006, they were on par with agricultural wages, and even a little higher. Today, they are much lower.”

The parliamentary committee report also placed its recommendations about the Consumer Price Index for Agricultural Labour used to determine the wages annually. It was “seriously concerned” that the index was “perhaps not sufficient to take into account the level of inflation during the time-period under study”, and pointed out that this impacted the most vulnerable groups.

In August 2024, the government told Parliament that if calculations as per the index results in a lower wage rate than the previous year, wages are being protected by retaining the previous year’s rate. States can also provide wages over and above rate notified by the Union government.

Payment delays and tech glitches

According to MGNREGS data, the total delayed payment (stage-1, state responsibility) as on January 27 was Rs 949 crore for 2024-25. Further, the delay compensation paid already during the year was about Rs 8 lakh, while dues accrued were over Rs 23 lakh. According to the Act, if the workers are not paid their wages within 15 days, the beneficiary is entitled to delay payment at the rate of 0.05 percent of unpaid wages per day of delay beyond the 16th day of closure of muster roll.

Claims for around 124 million days for delay compensation were rejected, of which 95 percent were rejected stating, ‘Compensation not due’.

Drèze said that the MGNREGA wage payments are neither timely nor reliable and sometimes workers are not paid at all, for instance due to technical glitches. “All this has sapped workers' enthusiasm for MGNREGA. This undermines the entire programme, and also opens the door to corruption. That is why I say that it is important to raise MGNREGA wages, and also to pay on time.”

The Aadhaar-Based Payment System and the National Mobile Monitoring System for managing attendance online were found to be creating serious difficulties for MGNREGS workers. The NMMS was made mandatory from January 2023 and ABPS a year later. Curbing corruption and leakages in MGNREGS is a mandate of ABPS, according to the government.

Experts said that the NMMS needed to be scrapped because it meets no objective, and the use of technology had to be appropriate for workers and not cause them more pain, IndiaSpend had reported in May 2023.

A November 2024 analysis by Suguna Bheemarasetti and others, based on 31.36 million MGNREGA wage transactions sampled across 10 states from the financial year 2021-22, showed no statistically significant difference either in timely payment of wages or in payment rejections between the ABPS and the standard account-based methods. The delay compensation by the Union government alone was nearly Rs 40 crore, it said.

The paper also highlights that the trifurcation of wage payments based on caste – which was introduced in March 2021 and later withdrawn – “increased friction between communities” due to differences in payment time despite working together. The government did not assume any accountability on its impact, it said.

A March 2022 standing committee report said that the committee were “taken aback and aghast” at the “...audacious practice of wages being paid to the MGNREGA beneficiaries on the basis of caste”, which began in 2021-22.

Sharing its concerns, the December 2024 standing committee report said the APBS “should not be made mandatory”, and an alternative mechanism “should always operate side by side to ensure that the primary goal of MGNREGA to provide wages does not get defeated due to lack of proper implementation of technology” as the government began seeding workers accounts for ABPS. By January 27, accounts of 99.5 percent of active workers – who have worked at least one day in the last three financial years – were Aadhaar-seeded.

The report said that lack of Internet connectivity and power, and lack of access to smartphones was affecting attendance uploads of workers on NMMS, and ultimately to delayed wages. “...though a right step in eradicating irregularities to [a] certain extent, [NMMS] still has a long way to go in terms of its execution,” noted the report.

There is a provision for correction at the district level where there is a discrepancy in the physical roll and NMMS, said Chakradhar. “But this is hardly used because supervising MGNREGS mates are at the bottom of the hierarchy and find it difficult to access the district system.”

Women’s participation high but varies state-wise

MGNREGA wages are gender-neutral unlike other work where there is wage discrimination. The higher wages for men in agriculture and construction and other informal wage work keep men away from MGNREGS work most of the year, while other systemic issues like MGNREGS wage delays disincentive them from seeking such work. The programme has a priority to ensure that at least one-third of the work is provided to women who have registered and requested for work.

According to the International Labour Organisation’s 2025 employment trends report, female labour force participation rate in lower-middle-income countries has increased owing to expansion in India. But since much of this expansion involves women working as contributing family workers, the increase in female labour force participation is unlikely to be reflected in the gross domestic product and will affect labour productivity estimates in the future, it said.

“MGNREGA has always been an attractive option for them, because it allows them to combine their household responsibilities with some paid work,” Reetika Khera, economist and faculty at the Indian Institute of Technology Delhi, had told IndiaSpend in a May 2024 interview. It is rare for them to find other forms of paid work outside the house that would allow them to do so, she pointed out. In any case, opportunities for paid work outside the house are not easy to come by.

According to data from 2018 to 2024-25, as of January 27, more than half of those employed under the scheme, on average, were women. But there are state-wise variations in women’s participation. For example, all southern states – Andhra Pradesh, Kerala, Karnataka, Tamil Nadu and Telangana – reported nearly 50 percent or more women’s participation. Kerala and Tamil Nadu reported more than 85 percent. In contrast, Uttar Pradesh reported less than 40 percent women participation during the same period.

Overall, on average, while women accounted for 53 percent of those who participated in the programme, their share of work was higher at 56 percent.

The role of Kudumbashree, Kerala’s poverty eradication and women’s empowerment mission, has been significant in mobilising women for the unskilled labour opportunities that MGNREGS offers, and ultimately changing old attitudes, IndiaSpend reported in May 2018.

Again, increasing days of work alone will not suffice as it depends on local contexts and the political economy. “Even though 300 days of work are offered under MGNREGS in Odisha in migration blocks, the most vulnerable households struggle to benefit due to significant wage delays and comparatively lower earnings,” said Chakradhar. “Households that can navigate these challenges and afford for women to remain in villages are better able to utilise the scheme.”

This report is republished with permission from IndiaSpend, a data-driven, public-interest journalism non-profit. It has been lightly edited for style and clarity.

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