Social security & a dream scheme

Dr Jintu Sarma

(drjintusarma@gmail.com)

The Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA), enacted in 2005, represents one of the most significant experiments in social security and “right-based” development in human history. As a demand-driven programme that guarantees 100 days of unskilled manual labour to every rural household, its historic importance lies in its shift from viewing the poor as “beneficiaries” of charity to “right-holders” of employment. Before MGNREGA, rural employment schemes in India were often top-down, discretionary, and sporadic. MGNREGA fundamentally changed this paradigm by introducing a legal guarantee. For the first time, if the government failed to provide work within 15 days of a demand, the applicant was legally entitled to an unemployment allowance. This legislative framework provided a safety net for approximately two-thirds of the Indian population. By anchoring the programme in the “Right to Work”, the Act aimed to address chronic poverty, seasonal unemployment, and the lack of bargaining power among the rural poor.

The impact of MGNREGA extends far beyond simple income transfer; it has reshaped the socioeconomic fabric of rural India in several transformative ways. MGNREGA has acted as a critical insurance policy against agricultural failure and lean seasons. Research shows that the programme has significantly reduced the size of outstanding debts for vulnerable households, moving them away from the clutches of high-interest moneylenders. During the COVID-19 pandemic, it served as a lifeline, compensating for 20–80% of income loss for migrant workers returning to their villages. One of the most profound impacts of the Act has been on gender parity. The Act mandates that at least one-third of beneficiaries must be women, but in practice, women’s participation has often exceeded 50%. By ensuring equal pay for men and women, MGNREGA has challenged traditional wage gaps. Wages are paid directly into bank accounts, giving women greater control over household finances and a stronger voice in decision-making. By providing employment at the doorstep (within 5 km of the residence), the scheme has reduced “distress migration”—where families are forced to move to urban slums for survival during non-harvest seasons. This has allowed families to stay together, ensuring better continuity in children’s education and access to local healthcare. The programme is not just about “digging holes and filling them.” It focuses on Natural Resource Management (NRM). Millions of assets have been created, including water conservation and harvesting structures (ponds, check dams), renovation of traditional water bodies, and rural connectivity through all-weather roads. These assets improve agricultural productivity, helping the rural economy become more self-sustaining over time.

MGNREGA has played a pivotal role in empowering Panchayati Raj Institutions (PRIs). The Act mandates that at least 50% of the works must be executed by Gram Panchayats. Furthermore, it introduced the concept of social audits, where the community publicly reviews the expenditures and outcomes of the projects. This has fostered a culture of transparency and accountability, even if implementation remains uneven across states.

The landscape of rural development in India is currently witnessing a transformative shift. For nearly two decades, the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) stood as the bedrock of social security in rural India. However, in late 2025, the T government introduced a successor: the Viksit Bharat – Guarantee for Rozgar and Ajeevika Mission (Gramin), popularly known as the VB–G RAM G scheme.

As India aims for its “Viksit Bharat @2047” vision, the government replaced MGNREGA with the VB–G RAM G Bill in December 2025. This new scheme is designed to address the structural limitations of its predecessor while aligning with a modern, digital, and climate-resilient economy. As per this scheme, the statutory work guarantee has been raised from 100 to 125 days per year, providing a 25% boost in potential annual income for rural families. Unlike the scattered work categories of the past, G-RAM-G focuses on four strategic pillars: water security, core infrastructure, livelihood assets, and climate resilience. A significant new provision allows states to “pause” the scheme for up to 60 days during peak sowing and harvesting seasons. This ensures that farmers have access to labour when they need it most, preventing artificial wage inflation during critical farming periods. The scheme has moved from a 100% centrally funded model for wages to a 60:40 split between the Centre and States (with 90:10 for Himalayan and NE states). This aims to increase state accountability and “skin in the game. Despite the improvements, the new scheme faces hurdles. The 60:40 funding ratio has drawn concern from cash-strapped states, which fear the financial burden may lead to reduced work availability.

Furthermore, the shift from a “demand-driven” to a “normative-allocation” model (where the Centre determines budgets in advance) is seen by some as a dilution of the absolute “Right to Work. The main reason people find MGNREGA “more significant” is the shift from a “demand-driven” to a “supply-driven” model. Under VB-G RAM G, the Centre now sets “normative allocations” (budget caps) for states. If the money runs out, the “guarantee” may effectively disappear, whereas MGNREGA’s budget was theoretically infinite because it had to meet whatever demand existed on the ground.

The historic importance of MGNREGA lies in its success in establishing work as a legal right and saving millions from starvation. This move has sparked significant debate because the new legislation omits the name of Mahatma Gandhi from the scheme’s title. However, the VB–G RAM G scheme acknowledges that a modern India requires more than just survival; it requires resilience and growth. By increasing workdays, focusing on durable assets, and integrating with the agricultural cycle, the new mission attempts to turn rural employment into a powerful engine for national development.