Laborers are working on desilting works under the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS). | Photo credit: The Hindu
An economic survey tabled in Parliament on Thursday (Jan 29, 2026) defended the government’s decision to scrap Mahatma Gandhi’s National Rural Employment Guarantee Scheme (MGNREGS), saying that while the program has helped stabilize rural incomes since it was launched in 2005, it has long been plagued by “deep structural problems”.
The survey described the new rural employment legislation — the Viksit Bharat Guarantee for Rozgar and Ajeevika Mission (Gramin) Act, 2025 — as a “comprehensive legislative reset” designed to address deficiencies in the UPA-era scheme.
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Citing the latest November 2025 Survey of Rural Economic Conditions and Sentiments (RECSS), the survey noted a “broad strengthening of rural economic fundamentals”. According to the RECSS, rural India is experiencing strong consumption, high income growth, rising investment, better access to formal credit, lower inflation perception, better ability to repay loans and high satisfaction with rural infrastructure. Another research report cited by the survey shows rural consumption at the highest level in 17 quarters, driven by growth in both farm and non-farm real wages.
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In this context, the survey said that the demand for MGNREGS is continuously declining. Person-days generated fell from a pandemic peak of 389.09 million in FY21 to 183.77 million in FY26 (through December 31, 2025), a decline of more than 53%. This decline coincides with a decline in rural unemployment from 3.3% in 2020–21 to 2.5% in 2023–24, indicating that many households are finding non-agricultural or other forms of work outside MGNREGS.
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But activists and labor unions say demand has been “artificially suppressed” due to low budget allocations and technological barriers such as mandatory digital attendance, which they say have created high barriers for workers.
The survey emphasized that improved rural economic conditions and reduced dependence on MGNREGS necessitated “reviewing the design and objectives of employment guarantee schemes in the light of changing rural realities”. It also acknowledged that the scheme contributes to income stabilization and the creation of basic infrastructure, which it says has “changed the nature of rural employment requirements”.
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Female participation has increased sharply from 48% in FY14 to 58.1% in FY25. But the survey said these gains were overshadowed by “deeper structural problems”, including a mismatch between spending and physical progress, not doing work on site, using machines for labour-intensive tasks and frequent bypassing of digital attendance systems. Embezzlement has accumulated over time and only a small proportion of households have completed 100 days of work after the pandemic, suggesting that the system’s architecture has “reached its limits”.
Published – 29 Jan 2026 19:37 IST
