MGNREGA overhauled as overall architecture had reached limits: Eco Survey
Reassessment needed in light of evolving rural realities; MGNREGS structural weakness limited its effectiveness, says Survey
 "MGNREGA overhauled as overall architecture had reached limits: Eco Survey")
The Economic Survey 2025–26 tabled in Parliament on Thursday said the Centre decided to comprehensively overhaul the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) through the Viksit Bharat–Guarantee for Rozgar and Ajeevika Mission (Gramin) Act, 2025, despite the scheme’s role in providing wage employment, stabilising rural incomes and creating basic infrastructure since 2005.
The Survey said persistent structural issues—such as work not being executed on the ground and expenditure not matching physical progress—had crept in over time.
“While delivery systems improved, the overall architecture of MGNREGA has reached its limits and warrants reassessment in light of evolving rural realities,” it said.
The Survey noted that although a range of administrative and technological reforms over the years enhanced implementation—leading to improvements in participation, transparency and digital governance—monitoring across several states revealed continuing gaps. These included frequent bypassing of digital attendance systems, misappropriation accumulating over time, and only a small proportion of households completing the full 100 days of employment in the post-pandemic period.
Rural employment, the Survey said, has been a cornerstone of India’s social protection framework for nearly two decades. Since its enactment in 2005, MGNREGS has provided wage employment, stabilised rural incomes and created basic infrastructure by guaranteeing at least 100 days of unskilled work to rural households.
“Over time, increasing incomes, improved connectivity, widespread digital adoption and diversified livelihoods have transformed rural employment requirements, underscoring both the programme’s achievements and the need to reassess its design and objectives,” it said.
The Survey highlighted that reforms led to steady gains: women’s participation rose from 48 per cent in FY14 to 58.1 per cent in FY25; Aadhaar seeding expanded sharply; the Aadhaar-Based Payment System was widely adopted; and electronic wage payments became nearly universal.
Monitoring of works also improved, with a large expansion in geo-tagged assets and a growing share of individual assets created at the household level. Field-level staff, the Survey said, played a critical role in sustaining implementation despite limited resources.
However, alongside these gains, deeper structural weaknesses persisted.
“Against this backdrop, the government has enacted the Viksit Bharat–Guarantee for Rozgar and Ajeevika Mission (Gramin) Act, 2025, also referred to as the VB–G RAM G Act,” the Survey said.
The Act represents a comprehensive statutory overhaul of MGNREGS, aligning rural employment policy with the long-term vision of Viksit Bharat 2047, while strengthening accountability, infrastructure outcomes and income security.
“The VB–G RAM G Act, 2025 marks a decisive shift in India’s rural employment framework,” the Survey said. “While MGNREGS delivered significant gains in participation, digitisation and transparency, persistent structural weaknesses limited its effectiveness.”
The new framework builds on earlier improvements while addressing their shortcomings through a more modern, accountable and infrastructure-focused approach, it added.