Reforms in MGNREGA Under VB-G RAM G
The transformation of the MGNREGA scheme to align with the Viksit Bharat 2047 vision has sparked widespread criticism. Below is a comprehensive analysis of the revisions:
1. Employment Guarantee
- The new law aims to guarantee 125 days of employment per rural household, an increase from the previous 100 days framework.
- Historically, only about 7.5-8% of households completed 100 days of work annually, with average employment days hovering around 50.4 during FY21-25.
- In FY25, 5.78 crore households participated in MGNREGA, nearing the pre-COVID average of 5.0 crore households.
2. Fiscal Implications
- The shift from a central sector scheme to a centrally sponsored scheme (60:40 ratio) raises concerns about increased state fiscal responsibilities.
- The Union government spent Rs 9.95 lakh crore on MGNREGA over 19 years, with 80% of funds released between FY15-FY25.
- The budget for 2025-26 is Rs 86,000 crore, the highest ever, with central share potentially reaching Rs 95,692 crore in FY27.
3. Wage Compensation
- MGNREGA wages increased from Rs 88 to Rs 267 per day, with a 10% real-term increase from FY08-FY12 to FY25.
- The shift is expected to improve worker compensation and boost consumption.
4. Productive Asset Creation
- Previously, projects often lacked economic relevance, resulting in a 13.3% gap between work demanded and provided.
- 84% of the 9.6 crore assets created since inception were developed in the last decade.
- Focus areas include water security, rural infrastructure, and climate resilience, integrated with national systems.
5. Funding Allocation
- Normative funding replaces the demand-driven model to ensure state-specific allocations based on local needs.
- Simulations indicate most states will benefit from this allocation approach.
6. Role of Panchayati Raj
- Proposed changes encourage gram panchayats to collaborate in Viksit Bharat plans, enhancing grassroots democracy.
7. Decline in Rural Poverty
- The share of MGNREGA expenditure as a percentage of the poverty line is minimal, suggesting diversified income sources in rural areas.
Overall, VB-G RAM G aims to modernize MGNREGA, ensuring accountability, transparency, and technological integration to benefit both the economy and society. The changes are seen as a potential catalyst for a socio-economic transformation.
