Central MGNREGS Allocation Declines Steadily Over Five Years

New Delhi: The Union Government’s financial commitment to rural employment has steadily declined over the past five years, even as it introduces a new law promising expanded job guarantees. Official data placed in Parliament show a clear reduction in Central releases under the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS), along with a shift of financial responsibility to States under the newly enacted Viksit Bharat – Guarantee for Rozgar and Ajeevika Mission (Gramin) Act, 2025.

In a written reply to Unstarred Question raised by CPI(M) MP Dr John Brittas, the Centre provided year-wise figures of its share under MGNREGS. The data reveal that total Central releases have fallen from 1,10,519.91 crore rupees in 2020–21 to 97,878.00 crore rupees in 2021–22, 90,219.10 crore rupees in 2022–23, 88,760.49 crore rupees in 2023–24 and 85,333.69 crore rupees in 2024–25. This marks a decline of more than 25,000 crore rupees in five years compared to the pandemic year, when rural employment demand had sharply increased.

The reduction comes at a time when many rural households continue to face economic stress, irregular farm income and limited employment opportunities. Despite this, the Centre’s allocation trend shows a gradual contraction.

More significantly, the Government did not disclose the expected financial outlay under the new Viksit Bharat – Guarantee for Rozgar and Ajeevika Mission (Gramin) Act. While it confirmed a revised cost-sharing formula of 90:10 for North-Eastern and Himalayan States and 60:40 for other States, it did not provide any projected overall allocation, State-wise estimates or fiscal projections.

An examination of Kerala’s figures highlights the likely impact of the new sharing pattern. In 2023–24, Kerala received 3,532.57 crore rupees as Central share under MGNREGS and contributed 170.22 crore rupees from the State’s side, taking total expenditure to 3,702.79 crore rupees. If the 60:40 formula under the new Act is applied to the same expenditure level, Kerala’s share would rise to around 1,481.12 crore rupees. This would mean an additional burden of about 1,310.89 crore rupees compared to its 2023–24 contribution.

Even without considering the proposed expansion of employment entitlement to 125 days, the revised formula would sharply increase the financial responsibility of States. Once the extended guarantee becomes fully operational, the State share is expected to rise further.