MGNREGS coverage and workdays fell sharply in 2025–26: LibTech India

A study by LibTech India, a research organisation that monitors rural employment schemes, found a national average decline of 10.4 percent in MGNREGS workday...

What Happened

A study by LibTech India, a research organisation that monitors rural employment schemes, found a national average decline of 10.4 percent in MGNREGS workdays during April–September 2025 (first half of FY 2025–26) compared to the same period in 2024–25.
The number of active workers under the scheme fell by approximately 8 percent year-on-year.
Telangana recorded the steepest decline among major states: 47.6 percent fewer workdays in the same period, with average household income from the scheme falling from ₹8,690 to ₹7,004 — a loss of ₹1,686 per household.
Andhra Pradesh saw a 23.2 percent decline in total person-days generated — from 2,422.84 lakh in 2024–25 to 1,859.77 lakh in 2025–26.
The budget allocation for MGNREGS in 2025–26 remained stagnant at ₹86,000 crore for the fifth consecutive year — lower in real terms than actual expenditure in 2023–24 (₹89,154 crore), while a fund deficit of ₹9,860 crore was recorded during 2024–25.

Static Topic Bridges

MGNREGA: Statutory Framework and the Right to Work

The Mahatma Gandhi National Rural Employment Guarantee Act, 2005 (MGNREGA) was passed on August 23, 2005 and came into force in February 2006. It is a demand-driven entitlement programme — the state is obligated to provide work when demanded, not merely when convenient. Section 3 of the Act guarantees at least 100 days of unskilled manual work per financial year to every rural household whose adult members volunteer. If work is not provided within 15 days of application, the state government must pay an unemployment allowance under Section 7.

Constitutional grounding: Article 41 (DPSP) — directs the state to secure the right to work in cases of unemployment; MGNREGA is the legislative expression of this directive.
Article 41 is non-justiciable (Part IV — DPSPs), but MGNREGA converts the directive into a statutory right, making the 100-day entitlement legally enforceable.
Wages are determined by state governments and indexed to the CPI-AL (Consumer Price Index for Agricultural Labourers).
Unemployment allowance (Section 7): payable if work is not provided within 15 days; one-fourth of the minimum wage for the first 30 days, one-half thereafter.
Scheme is centrally funded: Centre bears 100 percent of wage costs, 75 percent of material costs.

Connection to this news: The decline in workdays and coverage raises questions about whether the statutory 100-day entitlement is being delivered in practice and whether states are discharging their obligation to pay unemployment allowances when work is denied.

Budget Stagnation and Demand-Supply Mismatch in Rural Employment

A structural tension in MGNREGA is that it is a demand-driven scheme funded through fixed budget allocations. When actual demand exceeds the budget — which has repeatedly occurred — states delay wage payments, creating liquidity crises for the most vulnerable households. The Rs 86,000 crore allocation in 2025–26 is unchanged from 2024–25, yet actual spending in 2023–24 was ₹89,154 crore. In 2024–25, a fund deficit of ₹9,860 crore was recorded, with ₹6,948.55 crore in pending wages and ₹974.38 crore in unpaid wages outstanding.

MGNREGA is classified as a Centrally Sponsored Scheme (CSS) — funding shared between Centre and states, but wage costs are 100 percent centrally funded.
Delayed wage payments attract penalty provisions under the Act's Payment of Wages Schedule, but implementation is weak.
The 15-day payment window: wages must be paid within 15 days of work completion; delays beyond this entitle workers to compensation.
Economic Survey 2026 cited a stronger rural economy to propose replacing MGNREGA with a restructured scheme (VB-GRAMG), signalling potential policy shifts in the scheme's design.

Connection to this news: Stagnant allocation against growing need — aggravated by payment delays — directly explains the fall in coverage: workers who face delays in receiving wages disengage from the scheme.

Federalism and Monitoring: Centre-State Roles in MGNREGA

MGNREGA implementation is jointly managed: the Centre sets the legislative framework and provides funds, while states and gram panchayats administer the scheme. The Gram Panchayat is the primary implementing agency (Section 16), responsible for registering households, issuing job cards, planning works, and supervising. The Ministry of Rural Development maintains the MIS (Management Information System) — a real-time database tracking job card holders, work demanded, work provided, and wages paid. This transparency infrastructure enables independent monitoring organisations like LibTech India to identify gaps.

Social Audit: MGNREGA mandates regular social audits (Section 17) — a community-based accountability mechanism; Social Audit Units (SAUs) are constituted in each state.
Gram Sabha plays a central role in planning MGNREGA works and verifying muster rolls.
MGNREGA funds can only be spent on permissible works: water conservation, land development, rural connectivity, flood-proofing — works that create durable community assets.
The scheme covers all rural districts (initially rolled out in 200 districts in 2006, expanded to all districts by 2008).

Connection to this news: The state-level variation in decline — Telangana at -47.6 percent vs the national average of -10.4 percent — illustrates how state-level administrative capacity, fund management, and political priorities shape actual outcomes under a centrally designed scheme.

Key Facts & Data

National decline in MGNREGS workdays (Apr–Sep 2025): 10.4 percent.
Active worker count decline: approximately 8 percent year-on-year.
Telangana workday decline: 47.6 percent; average household income loss: ₹1,686 per household.
Andhra Pradesh person-days decline: 23.2 percent (2,422.84 lakh → 1,859.77 lakh).
MGNREGS budget 2025–26: ₹86,000 crore (stagnant for 5th consecutive year).
Actual expenditure 2023–24: ₹89,154 crore (higher than current allocation).
Fund deficit in 2024–25: ₹9,860 crore; pending wages: ₹6,948.55 crore.
Statutory guarantee: 100 days of wage employment per rural household per year (Section 3, MGNREGA 2005).
Unemployment allowance trigger: work not provided within 15 days of application (Section 7, MGNREGA 2005).
Constitutional basis: Article 41 (DPSP) — right to work under state obligation.