In a bold and controversial move, the Indian government led by Prime Minister Narendra Modi is fundamentally reshaping a globally unique programme that guarantees work for the rural poor. The changes risk igniting widespread discontent in the countryside, echoing the massive farmer protests that forced a policy U-turn just three years ago.
From a Legal Right to Discretionary Welfare
The Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA), enacted in 2005, created what was hailed as the world's most far-reaching legal right to employment. Under its provisions, any adult in rural India could demand work and was entitled to a job on local public projects within 15 days. If the government failed to provide work, it was legally obligated to pay an unemployment allowance.
The scheme has been a monumental force in rural India, generating 2 billion person-days of work annually for approximately 50 million households. Its social impact has been profound: over half of all workers were women, and about 40% came from Dalit and tribal communities, historically among the most marginalised groups. For a nation where vast numbers rely on precarious seasonal farm labour, MGNREGA stabilised incomes, raised rural wages, and reduced distress migration.
Now, the Modi administration is replacing this rights-based system with a centrally managed welfare scheme known as VB-G RAM G. This shift, opposed by economists including Nobel laureate Joseph Stiglitz and scholar Thomas Piketty, centralises power in New Delhi while offloading financial responsibility onto India's states.
A Guarantee Without the Guarantee?
As Jean Drèze, a key architect of the original MGNREGA, argues, the new plan fundamentally alters the social contract. The central government gains the discretion to decide when and where the scheme applies, can impose funding caps, and transfers the financial risk of failure to state governments. Crucially, if the scheme is 'switched off', a failure to provide work is no longer an illegal act.
"This is like providing a work guarantee without any guarantee that the guarantee applies," Prof Drèze has stated. While the old system was criticised for inefficiency and corruption, critics insist the answer was reform, not a structural dismantling that removes the legal entitlement. Poorer states, now facing new liabilities, may simply ration access to avoid paying out, effectively denying work to those who need it most.
Remarkably, Mr Modi appears to be repeating a political miscalculation. In 2020, his government passed three contentious farm laws aiming to deregulate agriculture. After a year of sustained and massive protests, notably led by farmers from electorally crucial states, the laws were repealed in 2021. The government misjudged farmers' attachment to existing protections, seeing market 'freedoms' where they saw vulnerability.
Climate Shocks and Electoral Reckoning
The timing of this overhaul could prove politically perilous. Employment guarantees act as critical crisis buffers when monsoons fail. States such as Rajasthan, Madhya Pradesh and Maharashtra are both drought-prone and electorally pivotal. With key regional polls scheduled for 2028 and 2029, a weak monsoon in the preceding years could see rural distress build under a now-limited and discretionary scheme.
Under the old MGNREGA, job demand automatically triggered supply, diffusing political blame. Under the new system, as Prof Drèze warns, the finger will point squarely at the central government in Delhi if work is denied due to new caps or switched-off schemes.
Grassroots protests are already being organised, with the potency of the movement lying significantly with the female workers who learned, through MGNREGA, to claim wages and work as a right—not charity. As seen in the farm protests, the prominent presence of women can transform technocratic policy disputes into powerful moral reckonings. If work is denied, a potent alliance of discontent in the courts, state assemblies, and on the streets could once again align, presenting a formidable challenge to the Modi government's rural agenda.
