A new deal for rural work

FOR nearly two decades, India’s rural employment guarantee has been one of the country’s most consequential social policy interventions. The Mahatma Gandhi National Rural Employment Guarantee Act transformed wage employment from a discretionary welfare measure into a legal entitlement, reshaping the relationship between the state and rural households. Its role in stabilising incomes, expanding women’s participation in the workforce, and creating basic village infrastructure is well established. Yet rural India in 2025 is markedly different from rural India in 2005, and the proposed Viksit Bharat Guarantee for Rozgar and Ajeevika Mission Gramin Bill seeks to reflect that transformation.

The new Bill is not a routine amendment. It replaces the MGNREGA framework with a fresh statutory architecture aligned with the long-term vision of Viksit Bharat 2047. Supporters see it as a necessary modernisation of a programme whose administrative and fiscal design has reached its limits. Critics argue that, in doing so, it risks diluting some of the core safeguards that made MGNREGA an effective and rights-based safety net. Both perspectives carry weight, and the Bill deserves scrutiny beyond slogans of continuity or rupture.

MGNREGA was conceived at a time of high rural poverty, limited non-farm employment, and weak infrastructure. A demand driven employment guarantee was appropriate to that context. Over time, the programme expanded in scale and sophistication. Digital wage payments, Aadhaar seeding, and geo tagged assets reduced leakages, while women’s participation rose steadily, making it one of the largest gender inclusive labour programmes globally. These gains form the benchmark against which the new framework must be assessed. The case for reform rests on genuine structural challenges. Despite improvements in transparency, only a minority of households have consistently accessed the full one hundred days of work in recent years. Payment delays persisted, and audits repeatedly flagged gaps between expenditure and physical outcomes. Many assets were fragmented or weakly linked to long term productivity. Incremental fixes struggled to overcome an architecture that had often prioritised expenditure absorption over durable development outcomes.

The Viksit Bharat Gramin Bill responds by repositioning rural employment as a tool for structural transformation rather than short term relief. Its most visible change is the expansion of guaranteed employment from 100 to 125 days per household. In a fiscally constrained environment this signals continued commitment to income security. However, it also highlights a shortfall. Parliament’s Standing Committee on Rural Development had recommended raising the guarantee to at least one hundred and fifty days, describing expanded employment as the need of the hour amid persistent rural distress. The Bill’s more modest increase therefore appears cautious rather than ambitious. Wages remain the most contentious issue. The Bill empowers the Centre to notify wage rates but is silent on a clear mechanism for periodic revision or inflation indexation. This omission revives a long-standing concern. Over the past decade, MGNREGA wages have lagged behind prevailing agricultural wages and the rising cost of living. Multiple expert committees examined wage setting without delivering durable reform, and parliamentary panels repeatedly flagged the inadequacy of existing rates. By not addressing this explicitly, the new framework risks perpetuating the erosion of real incomes within a scheme intended to function as a social safety net.

Fiscal architecture marks another significant shift. The Bill moves rural employment from a central sector scheme to a centrally sponsored one, with a sixty forty cost sharing ratio for most states and enhanced central support for special category regions. Proponents argue that this creates predictability and shared ownership, correcting the uncertainty of open-ended demand driven budgeting. Critics counter that it shifts a substantial fiscal burden onto states, particularly poorer and high migration ones, potentially incentivising them to suppress demand rather than expand access. This concern contrasts with the Standing Committee’s call for a stronger central fiscal role, especially during periods of high rural distress. Perhaps the most consequential change is conceptual. MGNREGA was explicitly demand driven, allowing households to seek work when needed. The new Bill introduces normative allocations determined by the Centre and allows for state notified pauses in works during peak agricultural seasons. Supporters view this as rational planning that protects farm operations and prevents labour shortages. Critics warn that it risks turning the guarantee into a supply driven programme, weakening workers’ bargaining power. Research has shown that the availability of guaranteed public employment strengthened labourers’ negotiating position even outside the scheme. Seasonal restrictions could inadvertently restore dependence on local employers during critical months.

Technology driven governance sits at the centre of this debate. Mandatory biometric attendance, real time monitoring, and integrated digital dashboards promise greater transparency and accountability. Yet parliamentary scrutiny has highlighted persistent failures of existing systems, particularly in low connectivity areas, leading to wage delays and exclusions. The challenge is not whether technology should be used, but whether it is robust enough to serve workers rather than penalise them for system failures. Without reliable offline alternatives and grievance redressal, a technology heavy approach risks undermining access.

At the same time, the Bill addresses several long-standing criticisms. By aligning employment with four priority verticals, water security, core rural infrastructure, livelihood assets, and climate resilience, it seeks to improve asset quality and long term returns. Decentralised planning through Viksit Gram Panchayat Plans, integrated with national spatial frameworks, offers the potential for better coordination between local needs and national priorities. Increasing the administrative expenditure ceiling recognises that effective delivery requires trained staff and technical capacity, an area long neglected.

The Viksit Bharat Gramin Bill therefore represents both continuity and departure. It retains the moral commitment to a right to work while reimagining rural employment as a strategic instrument of development. Yet it also departs from key principles that defined MGNREGA, notably demand responsiveness, inflation protected wages, and strong central fiscal backing. Whether this transition strengthens or weakens rural livelihoods will depend less on legislative intent than on implementation choices and political willingness to course correct. Parliament’s Standing Committees have articulated a clear reform agenda, expand employment, ensure fair wages, preserve access, and maintain adequate funding. The Bill incorporates parts of this vision while sidelining others.

The writer is a policy analyst focusing on employment, demographics, and economic development. He writes on the intersections of workforce trends, technology, and industrial policy