MGNREGS work demand drops 28% in December after law change

The Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS), enacted on August 25, 2005, is a landmark legislation that guarantees the 'right to work' to adult members of any rural household willing to do unskilled manual work for at least 100 days in a financial year. Conceived as a social safety net and a powerful tool for poverty alleviation, rural infrastructure development, and women's empowerment, MGNREGS has been instrumental in providing crucial income support to millions across rural India. Its significance was particularly highlighted during the COVID-19 pandemic, where it served as a vital cushion for returning migrant workers, preventing widespread destitution.

The recent report indicating a 28.4% drop in work demand under MGNREGS in December, with 18.44 million people seeking work compared to 25.77 million a year earlier, raises important questions about the scheme's current trajectory and the underlying factors. The article attributes this decline, in part, to a "law change." While the specific "law change" isn't detailed, a significant policy shift that has recently impacted MGNREGS is the mandatory implementation of the Aadhaar-Based Payment System (ABPS) for wage payments. From February 1, 2023, and reiterated for full implementation by December 31, 2023, ABPS became the default mode for wage disbursements, aiming to enhance transparency and reduce leakages. While beneficial for financial inclusion in theory, its implementation has reportedly led to the exclusion of many genuine beneficiaries whose Aadhaar numbers are not properly seeded with their bank accounts or whose biometric authentication faces technical glitches. This administrative hurdle could be a major contributor to the observed drop in work demand, as eligible workers might be unable to register or receive payments.

Key stakeholders involved in MGNREGS include the **Central Government**, primarily through the Ministry of Rural Development, which formulates policies, allocates funds, and monitors overall implementation. **State Governments** are responsible for executing the scheme, managing funds, and overseeing district and block-level administration. At the grassroots, **Gram Panchayats** are the primary implementing agencies, responsible for identifying works, issuing job cards, and processing wage payments. **Rural Workers** are the direct beneficiaries, and their ability to demand and receive work is central to the scheme's success. Lastly, **Civil Society Organizations and Activists** play a crucial role in monitoring the scheme's implementation, advocating for workers' rights, and highlighting issues like wage delays or exclusion.

This drop in demand matters significantly for India's rural economy and social fabric. Historically, high MGNREGS demand often signals rural distress, such as agricultural downturns, droughts, or economic slowdowns. Conversely, a sharp decline could indicate either a robust rural economy with better alternative employment opportunities or, more concerningly, administrative bottlenecks preventing access to the scheme. If the latter, it means a crucial safety net is failing those who need it most, potentially exacerbating rural poverty, increasing vulnerability, and hindering the progress made in areas like women's financial empowerment, as the scheme mandates 33% participation for women. Moreover, a reduction in MGNREGS work also impacts the creation of durable assets in rural areas, such as water conservation structures, rural roads, and irrigation facilities, which are vital for long-term rural development.

The historical context of employment guarantee schemes in India dates back to the Directive Principles of State Policy (DPSP) in the Indian Constitution, specifically **Article 41**, which directs the State to make effective provision for securing the right to work, to education, and to public assistance in cases of unemployment, old age, sickness, and disablement. **Article 43** also speaks of securing a living wage and conditions of work ensuring a decent standard of life. The MGNREGA Act, 2005, is a legislative embodiment of these principles, providing a legal entitlement to work, unlike previous discretionary schemes. It was inspired by successful state-level models like the Maharashtra Employment Guarantee Scheme (MEGS) launched in the 1970s.

Looking ahead, the future implications are critical. If the decline is primarily due to ABPS implementation issues, the government must urgently address these challenges to ensure inclusive access. This could involve streamlining the linking process, providing robust grievance redressal mechanisms, and ensuring that no eligible worker is excluded due to technicalities. Failure to do so could undermine the very purpose of MGNREGS, leading to increased rural hardship and potentially impacting rural consumption and economic growth. The scheme's role as a counter-cyclical fiscal tool and a bulwark against rural distress remains paramount, making effective and accessible implementation crucial for India's journey towards equitable and sustainable development.