By Nanditha Subhadra
The Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA), enacted in 2005, was heralded as a revolutionary scheme to provide 100 days of guaranteed wage employment to rural households in India. On paper, it promised to alleviate poverty, create durable assets, and empower the rural poor. However, two decades later, it stands as a glaring example of good intentions derailed by rampant corruption, political exploitation, and zero productivity. What began as a safety net has morphed into an extra burden on taxpayers, siphoning billions with little to show in terms of societal benefit or economic growth. As the Narendra Modi-led government proposes replacing it with the Viksit Bharat—Guarantee for Rozgar and Ajeevika Mission (Gramin) or VB—G RAM G Bill, 2025, it’s high time to dissect why MGNREGA has failed spectacularly and why reform is overdue.
The Rot of Corruption and Political Misuse
At its core, MGNREGA is plagued by systemic corruption that undermines its very purpose. Reports reveal that over Rs 935 crore were misappropriated in MGNREGA schemes between 2017 and 2021 alone, with only a minuscule 1.34% recovered. Embezzlement is rampant, often involving fake job cards, ghost workers, and siphoned funds. In several states, central teams have uncovered financial misappropriation and procedural gaps, highlighting how the scheme’s implementation is riddled with leakages.
This corruption takes a particularly insidious form in states like Kerala, where political parties have weaponized the program for their gain. Workers under MGNREGA are frequently mobilized for party rallies and meetings, inflating crowd sizes while collecting “donations” from their meager wages. The scheme’s headworkers often collude in manipulating attendance records, allowing participants to claim pay without lifting a finger. Such practices not only drain public funds but also erode trust in government programs. To combat this, the central government introduced geo-tagging for worksites and attendance, requiring workers to mark presence within a 10-meter radius—a move that drew howls from opposition-ruled states like Kerala and Bengal, underscoring the depth of entrenched graft. Delayed wage payments, rigid rules, and unattractive wages further exacerbate the issues in Kerala, turning the scheme into a farce where workers and administrators game the system rather than deliver results.
Zero Productivity: Assets That Crumble and Work That Vanishes
One of MGNREGA’s biggest promises was the creation of productive rural assets like roads, ponds, and irrigation systems. In reality, these “assets” are often substandard, poorly planned, and politically motivated, offering no lasting benefit to society. Critics point out that the program produces shoddy infrastructure that crumbles within months, wasting resources without addressing real needs. In Kerala, for instance, allotted works are frequently chosen based on political interests rather than community requirements, with workers clocking in for less than an hour—or not at all—while still drawing salaries.
This lack of accountability translates to zero productivity. The scheme fails to impart skills or foster self-reliance, instead breeding dependency. Job card deletions have surged, with 27 lakh active workers removed in recent months, often arbitrarily, further exposing the program’s inefficiencies. Taxpayers foot the bill for this charade, funding a system that inflates rural wages artificially, distorting labor markets and driving up costs in sectors like agriculture.
The Economic Toll: Inflation, Distortion, and Taxpayer Drain
MGNREGA’s defenders tout it as a poverty alleviator, but evidence suggests it’s inflationary and burdensome on the economy. By guaranteeing wages without demanding commensurate output, it pushes up labor costs, making it harder for farmers to hire help. In Kerala, this has led to an exodus from agriculture, as inflated wages render farming unviable for many. Fields lie fallow, productivity plummets, and food security suffers—all while taxpayers subsidize idle workers.
The scheme’s funding woes compound the problem. Wage rates in 17 states remain below minimum wages, yet delays in payments—sometimes stretching months—leave workers in limbo. Insufficient budgets and lack of monitoring mean funds vanish into black holes of corruption, with no tangible returns. The central government’s full funding under MGNREGA has shielded states from accountability, allowing them to misuse resources without fiscal skin in the game. This has ballooned into a massive drain on national coffers, with little evidence of poverty reduction or rural resilience.
A Better Path: Restricting to Agriculture and Embracing Reform
Imagine redirecting MGNREGA workers as agricultural laborers under farmers—this could revitalize Kerala’s farming sector, which has withered under high wage pressures. By tying employment to productive agri-work, the scheme could boost output, reduce food imports, and create real value. The current setup, however, competes with farming, pulling labor away during peak seasons.
The proposed VB—G RAM G Bill, 2025, offers a glimmer of hope. It extends the guarantee to 125 days, shifts to a 60:40 Centre-State funding model (90:10 for special states), and bans work during agricultural seasons to prevent labor distortion. It also introduces state-level councils for better monitoring, aligning with the Viksit Bharat @2047 vision of a prosperous rural India. Opposition parties, like Congress, decry the removal of Mahatma Gandhi’s name as a petty ploy, ignoring the administrative efficiencies it brings. Priyanka Gandhi Vadra’s complaints about stationery costs miss the point: the real expense is perpetuating a flawed scheme.
MGNREGA has devolved into a taxpayer-funded illusion of employment, riddled with corruption, misuse, and negligible productivity. In Kerala and beyond, it exemplifies how political opportunism trumps public good. The VB—G RAM G proposal isn’t just a name change—it’s a necessary overhaul to make rural employment meaningful, accountable, and productive. Taxpayers deserve better than funding a bottomless pit; it’s time to prioritize efficiency over entitlement and build a truly Viksit Bharat.
