India’s Rural Jobs Guarantee Scheme Reforms Spark Debate on Its Future
December 23, 2025
India's famous rural jobs guarantee program, originally launched in 2005, has undergone major changes. The scheme, known as MGNREGA, provides every rural household the right to up to 125 days of paid work yearly. The new law raises workdays from 100 to 125 but changes funding. The federal government will cover 60% of costs, while states must pay 40%, increasing their financial burden.
The scheme offers manual jobs at minimum wages to rural households and is vital for many, especially women and disadvantaged groups. It helped millions during Covid and boosted rural incomes.
Federal agriculture minister Shivraj Singh Chouhan called the reforms "a law that stands firmly in favour of the poor." However, critics argue the changes risk centralizing control and reducing the guaranteed right to work. Economist Jean Dreze said, "It is the reduction of employment guarantee to a discretionary scheme."
Only 7% of rural families received the full 100 days of work last year, raising questions about cementing or raising the quota. A group of experts, led by UN poverty rapporteur Olivier De Schutter, warned that dismantling the original scheme would be "a historic error."
The program faces challenges like underfunding and payment delays. Still, studies show it helped reduce rural poverty by up to 26% and boost earnings by 14%. Yet critics note it does not solve India's larger problem: lack of good non-farm jobs in villages.
The government’s Economic Survey found that some richer states get disproportionate funds, pointing to administrative capacity as a key factor in work provision.
Despite the debates, MGNREGA remains central to rural lives. Whether these reforms strengthen or weaken this global model for poverty relief will unfold in the coming years.
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Tags:
India
Jobs Guarantee
Mgnrega
Rural Employment
Government Reform
Poverty
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