December 29, 2025 07:23 AM IST First published on: Dec 29, 2025 at 07:22 AM ISTThe passage of the VB–G RAM G Act to replace the MGNREGA is not a routine legislative exercise or a benign administrative reform. It is a fundamental retreat from India’s commitment to a legally enforceable right to work and an unmistakable shift away from decentralisation, federalism and economic dignity that have underpinned rural livelihoods for nearly two decades. The attempt to rebrand and restructure MGNREGA cannot be divorced from the ideology that no rural household willing to work will be left without livelihood support. Despite claims that the new law aligns with the ideals of Ram Rajya, good governance cannot be achieved by weakening Panchayati Raj institutions and marginalising states.The most damaging aspect of the new scheme is its reclassification of rural employment as a centrally sponsored programme with a 60:40 funding pattern between the Centre and the states. Under MGNREGA, the Centre bore the entire cost of unskilled wages, recognising that poorer states lack the fiscal capacity to guarantee employment during periods of distress. Today, states are already grappling with shrinking fiscal space, GST-related uncertainties and growing welfare obligations. Forcing them to bear a significantly higher financial burden will inevitably lead to reduced approvals and suppressed demand for work.AdvertisementThe government’s claim that the new framework enhances welfare by increasing the annual employment ceiling to 125 days is misleading. MGNREGA data shows that the issue has never been the statutory limit on workdays, but underfunding and delayed wage payments. Even during COVID-19 in 2020-21, when distress was at its peak, only about 9.5 per cent of rural households completed 100 days of work. Over the past three years, this figure has averaged close to 7 per cent. Raising the ceiling without guaranteeing adequate financial allocations is not an expansion of livelihood security.Equally troubling is the shift from a bottom-up, demand-driven framework to a centrally capped, supply-driven one. MGNREGA empowered rural households to demand work as a legal right, compelling the state to respond. The new law reverses this logic by allowing the Centre to determine allocations in advance and by making states liable for any expenditure beyond these caps. This will compel states to discourage the demand for work.MGNREGA routinely generates over two billion person-days of employment annually, supporting nearly 50 million rural households. More than half of its workforce consists of women, while around 40 per cent belong to SCs and STs, making it one of the most inclusive economic interventions anywhere in the world. Its early years coincided with unprecedented growth in rural wages. MGNREGA also led to the creation of durable rural assets that directly support agriculture and enhance climate resilience.AdvertisementThe politicisation of funding decisions undermines the credibility of the proposed framework. The suspension of MGNREGA funds to West Bengal for the past three years is a warning of how discretionary powers can be misused. Institutionalising such discretion under a new law will render the employment guarantee meaningless.most readThe new scheme must be withdrawn, and MGNREGA must be retained in its original, rights-based form.The writer is Leader of Opposition and former Chief Minister of Haryana