New Delhi: The Economic Survey 2025-26 said the rural employment scheme MGNREGS had reached its structural limits and warranted a reassessment in light of evolving rural realities, despite notable gains in participation and digital governance.
The survey, tabled in Parliament by Union Finance Minister Nirmala Sitharaman, said MGNREGS had remained a cornerstone of India’s social protection framework since 2005. It said the scheme provided wage employment, stabilised rural incomes, and created basic infrastructure by guaranteeing at least 100 days of unskilled work to rural households.
However, the survey noted that rising incomes, improved connectivity, digital adoption, and diversified livelihoods had transformed rural employment needs over time. As a result, it said the original design and objectives of MGNREGS now required a comprehensive review.
Administrative and technological reforms strengthened implementation in recent years. Women’s participation rose steadily from 48 per cent in FY14 to 58.1 per cent in FY25. At the same time, Aadhaar seeding expanded sharply, Aadhaar-Based Payment Systems saw wide adoption, and electronic wage payments became nearly universal. Moreover, monitoring improved through geo-tagged assets and a higher share of individual household assets.
MGNREGS reassessment leads to VB G-RAM G Act
Despite these improvements, the survey highlighted persistent structural weaknesses. It cited gaps such as work not executed on the ground, mismatches between expenditure and physical progress, machine use in labour-intensive works, and frequent bypassing of digital attendance systems. It also noted that only a small share of households completed 100 days of work after the pandemic.
Against this backdrop, the survey pointed to the enactment of the Viksit Bharat–Guarantee for Rozgar and Ajeevika Mission (Gramin) Act, 2025, known as the VB G-RAM G Act. It described the new law as a comprehensive statutory overhaul that aligned rural employment with the long-term vision of Viksit Bharat 2047.
The Act mandates weekly wage payments, or settlement within a fortnight, to reduce delays. It also raises the administrative expenditure ceiling from 6 per cent to 9 per cent to strengthen staffing, training, and technical capacity at the field level.
Further, the Act emphasises decentralised planning through Viksit Gram Panchayat Plans integrated with PM Gati Shakti. Gram Panchayats will implement at least half of the works by cost, ensuring local participation and convergence of resources.
The survey said the Act also focused on infrastructure outcomes by aggregating assets into a national rural infrastructure stack. It added that stronger transparency and accountability measures, including frequent social audits, real-time monitoring, and central oversight, aimed to curb irregularities and ensure sustainable financing.
