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PYQ Relevance [UPSC 2023] “Development and welfare schemes for the vulnerable, by its nature, are discriminatory in approach.” Do you agree? Give reasons for your answer. Linkage: MGNREGA avoided discretionary targeting by providing universal, demand-driven employment, unlike allocation-based schemes proposed under the new Bill.

Introduction

MGNREGA operationalised the constitutional obligation under Article 41 by guaranteeing 100 days of wage employment to every rural household. It institutionalised a justiciable right to demand work, decentralised planning through Panchayats, and ensured wage payments by the Centre. The proposed legislation fundamentally alters this architecture by removing legal enforceability and replacing it with discretionary financial allocations. 

Why in the News

The Union government has introduced the Viksit Bharat-G RAM G Bill, 2025 to replace MGNREGA, a rights-based, demand-driven employment guarantee law enacted in 2005. This marks the first attempt to dismantle a statutory employment guarantee and convert it into an allocation-based welfare scheme. The proposed shift alters core features such as demand-driven employment, decentralised planning, wage parity, and Centre-State cost sharing. At a time when 9.8 crore workers demanded work in 2024-25 but only 7.9 crore received it, and when wage arrears touch ₹8,000 per household, the change represents a sharp departure from the constitutional vision embedded in Article 41 and the Directive Principles.

How does the Constitution envision the Right to Work?

1. Article 41 (DPSP): Mandates State responsibility to secure the right to work within economic capacity.
2. Constituent Assembly Consensus: Recognised employment as central to economic democracy despite resistance from capitalist interests.
3. Ambedkar’s Interpretation: Treated Directive Principles as instruments of governance essential for social and economic justice.
4. MGNREGA Design: Converted a non-justiciable principle into an enforceable statutory right through demand-driven employment.

Article 41 of the Indian Constitution (DPSP): Right to work, to education and to public assistance in certain cases The State shall, within the limits of its economic capacity and development, make effective provision for securing the right to work, to education and to public assistance in cases of unemployment, old age, sickness and disablement, and in other cases of undeserved want.

Why was MGNREGA designed as a demand-driven employment guarantee?

1. Universal Access: Ensures employment to all adult rural residents, including women.
2. Demand Responsiveness: Adjusts employment provision based on household demand rather than fiscal ceilings.
3. Wage Equality: Guarantees equal wages for men and women with full Central funding.
4. Decentralised Planning: Empowers Panchayats to identify and execute locally relevant works.
5. Income Security: Acts as fallback employment when agricultural work or wages are unavailable.

How does the proposed Bill dismantle the core design of MGNREGA?

1. Normative Allocations: Replaces demand-based employment with expenditure ceilings fixed by the Centre.
2. Loss of Legal Guarantee: Removes citizens’ right to demand work.
3. Centralised Control: Transfers project design, audits, and approvals to the Union government.
4. Fiscal Burden Shift: Imposes nearly 40% cost liability on States already facing revenue constraints.
5. Digital Conditionalities: Makes Aadhaar linkage and online attendance mandatory despite connectivity gaps.

What are the implications for federalism and decentralised governance?

1. Fiscal Federalism: Undermines State autonomy by reducing Centre’s expenditure obligations.
2. Panchayati Raj Institutions: Weakens grassroots planning authority.
3. One-Size-Fits-All Approach: Ignores regional agrarian distress and labour demand variability.
4. Audit Centralisation: Curtails local accountability mechanisms.

How does the proposed framework alter rural labour markets and class relations?

1. Peak Season Prohibition: Bars MGNREGA work during peak agricultural periods.
2. Labour Bargaining Power: Weakens workers’ negotiating position vis-à-vis large landowners.
3. Wage Suppression: Forces acceptance of lower agricultural wages due to absence of fallback employment.
4. Mechanisation Context: Coincides with declining farm labour absorption capacity.

Which vulnerable social groups are disproportionately affected?

1. Worker Composition: 86% of MGNREGA workers belong to the poorest population segments.
2. Caste Dimension: 18% Scheduled Castes and 19% Scheduled Tribes participation.
3. Gender Impact: Women disproportionately affected due to wage inequality in agriculture.
4. Redressal Mechanisms: Elimination of grievance and advisory councils reduces access to justice.

What do funding trends and performance indicators reveal about policy intent?

1. Budgetary Trends: MGNREGA expenditure never exceeded 0.2% of GDP.
2. Worker Coverage Decline: Fall from over 7.7 crore workers to lower participation despite rising demand.
3. Workdays Reduction: Average household employment below 50 days instead of guaranteed 100.
4. Unemployment Allowance: Denial despite unmet demand in 2024-25.

Potential Positives in the Proposed Framework

1. Administrative Streamlining: Digital attendance, Aadhaar-based verification, and centralised audits aim to reduce ghost beneficiaries and procedural delays.
2. Fiscal Predictability: Normative financial allocations provide budgetary certainty and expenditure control for the Union government.
3. Project Efficiency: Centralised project design may improve technical quality and standardisation of works in certain regions.
4. Leakage Control: Emphasis on technology-driven monitoring seeks to strengthen financial accountability.
5. Policy Rebranding: The “Viksit Bharat” framing attempts to align rural employment with broader development narratives.

Way Forward: Reconciling Efficiency with Constitutional Guarantees

1. Rights Retention: Preserve the statutory right to demand work under Article 41 while allowing administrative flexibility.
2. Hybrid Funding Model: Combine demand-driven guarantees with indicative expenditure ceilings rather than rigid caps.
3. Cooperative Federalism: Restore shared decision-making on design, funding, and audits between Centre and States.
4. Panchayat Empowerment: Reinstate local planning authority to ensure region-specific employment generation.
5. Digital Inclusion Safeguards: Treat Aadhaar and online attendance as facilitative tools, not exclusionary conditions.
6. Wage Protection Mechanism: Ensure MGNREGA continues to function as a rural wage floor and labour market stabiliser.
7. Independent Social Audits: Retain grievance redressal and advisory councils to strengthen accountability.

Conclusion

MGNREGA represented a rare convergence of constitutional vision, decentralised governance, and rights-based welfare delivery. The proposed shift towards an allocation-driven framework seeks administrative efficiency and fiscal control but risks diluting the constitutional commitment to the right to work and cooperative federalism. A sustainable reform pathway lies not in dismantling the employment guarantee but in recalibrating it to combine efficiency with enforceable rights, fiscal prudence with decentralisation, and technology with inclusion. Strengthening, rather than substituting, MGNREGA remains the most constitutionally aligned route to addressing rural distress and employment insecurity.