The Ministry of Rural Development (MoRD) has proposed an allocation of Rs 5.23 lakh crore for the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) for five years until 2029-30. It was revealed that the outlay is 12% higher than the release sanctioned by the Central Government at Rs 4.68 lakh crore for MGNREGS in the previous financial years from 2020-21 to 2024-25.
A record high was noted in 2020-21 which followed a year into the COVID-19 pandemic where more than 7 crore rural families availed the scheme. The released peake to Rs 1,09,810 crore in that year. MGNREGS became a fallback for families who left the urban areas and returned to their villages after loss of employment. As per the MoRD proposal from May 15, it was sent to the Expenditure Finance Committee panel, who approves outlays for all government schemes.
On the other hand, the lowest release was reported in 24-25 at Rs 85,680 crore as families working under the MGNREGS reduced the gradual but effective recovery of the economy in the post-pandemic era. The least number of families was observed in 2024-25 at 5.79 crore. It must be noted that the MGNREGS scheme was suspended in West Bengal since the last three years.
As per Indian Express reports, the EFC appraisal cycle evaluates the goals and achievements of the scheme, thus deciding for the following Finance Commission cycle. However, the approval issued by the EFC is another tick-in-the-box considering MGNREGS is a government-backed scheme. Thus, no change is proposed in the current funding pattern across all components, as per reports.
MGNREG Act 2005
The MGNREGS is implemented by states and UTs under Section 4 of the MGNREG Act, 2005, which mandates each state to create a scheme providing at least 100 days of guaranteed unskilled work per year to willing rural households.
Section 22 outlines the funding structure: the Centre covers 100% of wages, administrative costs, and Social Audit Units, and up to 75% of material costs, including wages for skilled and semi-skilled workers. States are responsible for paying unemployment allowances, 25% of material costs, and expenses of the State Council.