Centre Cuts MGNREGA Budget by Rs 25,000 Crore, Excludes 1.76 Crore Families

New Delhi: The Central Government has excluded 1.76 crore families from the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) scheme over the last five years by gradually cutting its budget. In the financial year 2020–21, Rs 1.10 lakh crore was allocated to the scheme, supporting 7.55 crore families. However, in 2024–25, the budget was reduced to Rs 85,680 crore, bringing down the number of beneficiary families to 5.79 crore. This Rs 25,000 crore budget reduction directly impacted coverage and access.
Under the scheme, rural households are entitled to 100 days of guaranteed wage employment per year. Labour unions and opposition parties have demanded that this be increased to 200 days and that daily wages be raised to Rs 600. Several states, including Kerala, have consistently called on the Centre to increase financial support for the scheme to meet growing demands and inflation.
The Ministry of Rural Development had asked the Ministry of Finance’s Expenditure Finance Committee to approve Rs 5.23 lakh crore for MGNREGA between 2020 and 2025. However, only Rs 4.69 lakh crore was approved—12 percent less than requested. The demand for a revised allocation is still pending.
States argue that without a significant increase in the scheme's allocation, rural unemployment and distress will worsen. The consistent shortfall in budget support has already led to restricted access, with millions of rural families pushed out of the programme.