MGNREGA, which is based on a demand-driven legal guarantee of employment, has been a fundamental component of India’s rural welfare system. Stronger administrative authority is shown by recent revisions that permit pauses during the busiest agricultural seasons and transfer more financial responsibility to the states. The government claims that by preventing farm labour shortages and strengthening state ownership of the program, these actions increase labour market efficiency and fiscal discipline.
These modifications, however, give rise to federal and governance issues. States’ economic capacities differ greatly, and poorer states may be strained by growing financial obligations in the absence of sufficient assistance. Furthermore, there is an imbalance between authority and accountability because policy control is still centralised but expenses are decentralised. From the standpoint of social protection, any weakening of MGNREGA’s demand-driven structure runs the risk of undermining its function as a safety net in times of economic hardship, especially for poor rural households.
Therefore, to ensure that fiscal discipline does not come at the expense of social justice, a calibrated approach is required, one that maintains the statutory employment guarantee while enhancing planning, efficiency, and timely payments.
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About the Author: Jyoti Verma
