The reported move by the Union government to scrap the Mahatma Gandhi National Rural Employment Guarantee Act has drawn sharp criticism from economists, social activists and rural policy experts, who warn that the decision could have far-reaching consequences for employment security, rural livelihoods and social stability. An economist speaking at a public forum described the proposal as “economically short-sighted and socially devastating,” arguing that the programme remains a lifeline for millions of households struggling with irregular incomes, agrarian distress and climate uncertainty.
MGNREGA, enacted in 2005, guarantees 100 days of wage employment to rural households and has long been seen as a cornerstone of India’s social security framework. Over the years, it has provided critical income support during droughts, floods, economic slowdowns and even the COVID-19 pandemic. The economist said scrapping the scheme without a credible alternative would undo years of progress in poverty reduction and rural resilience.
According to the economist, the argument that MGNREGA has outlived its utility is flawed. While acknowledging implementation challenges such as delayed payments and uneven asset creation, he said these issues stem from administrative lapses rather than the design of the programme itself. “You do not demolish a bridge because it has cracks; you repair it,” he remarked, adding that dismantling MGNREGA would leave vulnerable populations without any fallback mechanism.
The criticism comes amid growing concerns over rising rural unemployment, stagnating farm incomes and increasing migration to cities. The economist pointed out that in many districts, MGNREGA wages form a crucial supplement to agricultural earnings, particularly for landless labourers, women and marginal farmers. Removing this support, he warned, could deepen inequality and push more households into chronic debt.
He also questioned the timing of the move, noting that climate-induced shocks are becoming more frequent and severe. Erratic rainfall, prolonged droughts and floods have made rural incomes increasingly unpredictable. In such a context, he said, employment guarantee schemes are not merely welfare measures but essential tools for economic stabilisation.
Beyond immediate economic impacts, the economist stressed that scrapping MGNREGA would also weaken democratic participation at the grassroots. The scheme, he noted, is deeply intertwined with local self-governance, as gram panchayats play a central role in identifying works, registering demand and implementing projects. This process, imperfect as it may be, gives rural citizens a sense of agency and involvement in decision-making. Removing the programme, he warned, would erode these participatory structures and further marginalise voices that are already underrepresented in policy debates.
The economist also raised concerns about intergenerational consequences. For many rural families, income from MGNREGA helps cover basic expenses such as food, healthcare and children’s education. Without this support, households may be forced to pull children out of school or push them into informal labour to make ends meet. Such outcomes, he argued, perpetuate cycles of poverty and limit social mobility, undermining long-term development goals that successive governments have claimed to prioritise.
He further argued that MGNREGA has symbolic significance as a commitment to constitutional values. By guaranteeing the right to work, the State acknowledges its responsibility to ensure livelihoods for its citizens. Rolling back such a guarantee, he said, sends a troubling signal about the direction of social policy. In times of economic uncertainty, he added, citizens look to the State for reassurance, not retrenchment. Policies perceived as withdrawing support risk weakening public trust in institutions.
Concluding his critique, the economist called for a broader national conversation on the future of employment and social security. Rather than dismantling existing safeguards, he urged the Centre to explore ways of integrating MGNREGA with climate adaptation, rural infrastructure and skill development initiatives. Such an approach, he said, could make the programme more resilient and relevant to contemporary challenges. Scrapping it outright, he warned, would be a decision whose social costs may only become visible when it is too late to reverse course.
A Lifeline for Rural India Under Threat
The economist traced the origins of MGNREGA to a period when rural distress had reached alarming levels. Conceived as a rights-based programme, it was designed not just to provide employment but to empower rural citizens by giving them a legal entitlement to work. This, he said, marked a fundamental shift from discretionary welfare to enforceable social security.
Over the years, MGNREGA has played a critical role in reducing seasonal migration, especially among the poorest households. By providing work close to home, the scheme allowed families to stay together and reduced dependence on exploitative labour markets in urban areas. Women, in particular, benefited from the programme’s emphasis on equal wages and local employment, leading to greater financial autonomy and participation in village economies.
The economist highlighted data showing that women account for a significant share of MGNREGA workers in several States. This, he argued, is evidence of the scheme’s inclusive design. Scrapping it would disproportionately affect women, who often have fewer alternative employment options due to social constraints and unpaid care responsibilities.
He also underscored the programme’s role in creating durable assets such as water harvesting structures, rural roads and soil conservation works. While acknowledging that asset quality varies, he said many regions have benefited from improved irrigation and groundwater recharge, contributing to long-term agricultural productivity. Abandoning the scheme, he warned, would mean abandoning these gains as well.
Critics of MGNREGA often cite fiscal burden as a reason for its removal. The economist countered this argument by pointing out that expenditure on the scheme constitutes a relatively small fraction of total government spending. Moreover, he said, the economic multiplier effects of rural wage employment generate demand for goods and services, stimulating local economies and contributing to overall growth.
He cautioned that reducing public investment in rural employment could have unintended macroeconomic consequences. Lower rural incomes would mean reduced consumption, which in turn could dampen demand in sectors ranging from consumer goods to small-scale manufacturing. “This is not just a rural issue; it affects the entire economy,” he said.
The economist also raised concerns about the moral implications of scrapping a rights-based programme. He argued that employment is not merely a matter of charity but a fundamental aspect of dignity and citizenship. Removing a legal guarantee without adequate consultation or safeguards, he said, undermines the social contract between the State and its citizens.
Economic Logic Versus Social Reality
Addressing claims that MGNREGA distorts labour markets by discouraging people from seeking private employment, the economist said such arguments overlook ground realities. In many rural areas, he noted, private employment opportunities are scarce, seasonal or poorly paid. MGNREGA does not replace private work but fills gaps during lean periods, ensuring minimum income security.
He also dismissed the notion that rural development can rely solely on market-driven growth. While infrastructure investment and private enterprise are important, he said they cannot substitute for social protection in a country with deep structural inequalities. “Markets do not automatically reach the poorest; the State has to step in,” he asserted.
The economist emphasised that rather than scrapping MGNREGA, the focus should be on reforming and strengthening it. Measures such as timely wage payments, better planning of works, use of technology for transparency and stronger grievance redressal mechanisms could significantly improve outcomes. He suggested that decentralisation and greater involvement of local governments could enhance accountability and effectiveness.
He also warned that scrapping the scheme could exacerbate rural unrest. With limited employment options and rising living costs, frustration among rural youth is already high. Removing one of the few guaranteed sources of work, he said, could fuel social tensions and migration pressures, placing additional strain on urban infrastructure.
The economist pointed to the experience of the pandemic as a stark reminder of MGNREGA’s importance. When economic activity came to a standstill, the scheme acted as a safety net for millions of returning migrants. Demand for MGNREGA work surged, demonstrating its role as a counter-cyclical tool during crises. Scrapping it, he said, would leave the country ill-prepared for future shocks.
He also questioned the transparency of the decision-making process. Any move to dismantle a programme of this scale, he argued, should be preceded by detailed impact assessments and consultations with States, experts and beneficiaries. Rushing such a decision, he warned, risks policy failure with irreversible social costs.
The economist acknowledged that public finances are under pressure and that priorities must be balanced. However, he insisted that cutting back on employment guarantees is a false economy. The social costs of unemployment, malnutrition and distress migration, he said, far outweigh the fiscal savings from scrapping the scheme.
As debates continue, the future of MGNREGA remains uncertain. For millions of rural households, the scheme represents more than just wages; it symbolises security, dignity and a measure of control over their lives. The economist concluded by urging policymakers to reconsider the move and view MGNREGA not as a burden but as an investment in social stability.
He warned that dismantling the programme could mark a retreat from the principles of inclusive growth and social justice. In a country still grappling with poverty and inequality, he said, employment guarantees remain a vital instrument of public policy. The question, he concluded, is not whether India can afford MGNREGA, but whether it can afford to do without it.
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