Tamil Nadu's MGNREGA efficiency outpaces bigger and poorer states

Under the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA), passed by Parliament in August 2005 and implemented in a phased manner from February the next year, state governments are required to provide work within 15 days of demand or pay an unemployment allowance. This guarantees up to 100 days of wage employment annually to every rural household that demands it.

 

However, execution varies widely across states. It is influenced by local governance capacity, awareness among rural people, and the administrative infrastructure. Tamil Nadu stands out in this landscape. Despite being more urbanised and prosp-

erous than states like Uttar Pradesh, Bihar, Madhya Pradesh, and Jharkhand, Tamil Nadu has consistently reported high fund utilisation and employment generation.

 

Unlike centrally allocated welfare schemes, the scheme is demand-driven, meaning funds are released based on the number of job requests raised by workers.

 

Over several financial years, the data shows that Tamil Nadu has received and utilised more funds than many larger and poorer states. This has triggered periodic accusations — particularly from Opposition parties and civil society groups — that the state is disproportionately cornering resources, raising concerns about whether wealthier and better-governed states are advantaged in what was meant to be an equity-oriented scheme. However, Tamil Nadu’s performance aligns with its higher work-demand registration, efficient fund absorption, and better execution metrics — factors that are critical in a demand-based model. 

On inquiry about this pattern, M Vijayabaskar, professor at the Madras Institute of Development Studies, said: “It’s a function not just of economic status or the ability to claim work. Demand has to be expressed and translated through better political institutions that exist in states like Tamil Nadu and Kerala.”

 

Fund releases and utilisation patterns

 

Between 2020-21 and 2023-24, Tamil Nadu received among the highest amount from the Centre. It got about ₹8,550 crore in 2020-21, increasing to about ₹12,140 crore by 2023-24. While Uttar Pradesh did lead in 2020-21 with ₹12,257 crore, Tamil Nadu overtook it in 2021-22 and remained close in following years. In contrast, Bihar, Madhya Pradesh, and Jharkhand consistently received lower allocations. For instance, Bihar received ₹6,647 crore in 2020-21, coming down to ₹6,238 crore in 2023-24, while Jharkhand’s allocation too dropped from ₹3,490 crore in 2020-21 to ₹2,585 crore 2023-24 in the same years.

 

The utilisation rates further reflect Tamil Nadu’s administrative capacity. In 2023-24, it recorded a rate of 105.64 per cent, meaning it spent more than the funds released, relying partly on pending liabilities.

 

Madhya Pradesh followed closely at 105.48 per cent, while Bihar and Jharkhand achieved 98.84 per cent and 140.48 per cent, respectively. However, this utilisation often reflects how aggressively a state is able to demand funds and execute works. As regards 2025-26, although it is still early in the financial year, Tamil Nadu has utilised 40.38 per cent, the lowest among all the states.

 

Vijayabaskar said the real question was not just why Tamil Nadu was performing better but why states like Bihar and Uttar Pradesh were not able to translate demand into work.

 

“It’s often the other way round — institutions in these states are unable to mediate or deliver on that demand,” he added.

 

Completion rates

 

Another metric on which Tamil Nadu leads is project completion. In 2022-23, it reported a completion rate of 98.02 per cent, followed by 94.48 per cent in 2023-24. This is markedly higher than in other large states: Madhya Pradesh (67.51 per cent), Jharkhand (59.50 per cent), Bihar (53.70 per cent), and Uttar Pradesh (79.76 per cent). The high completion rate in Tamil Nadu points to a well-oiled administrative machinery. While some of this can be attributed to better planning and quicker approvals, it raises the issue of disparity in execution capacity, which could influence fund flows. 

 

Employment days and persondays: Long-term gains

 

Over the past four years, Tamil Nadu has remained at the upper end in terms of average employment days provided per household, typically between 50 and 60 days.

 

In 2023-24, the state reported 59.44 days — ahead of Bihar (45.77), Jharkhand (50.22), Uttar Pradesh (50.37), and  Madhya Pradesh (48.85). While Madhya Pradesh reported a peak of 61.84 days in 2020-21, Tamil Nadu has demonstrated more stable and consistent performance year after year.

 

In contrast, Tamil Nadu’s record in generating persondays stands out not just for its consistency but also for its growth. It produced over 40.8 million persondays in 2023-24, its highest in four years, and maintained a stable range even in previous years. By comparison, Madhya Pradesh has shown a clear and steady decline — from 34.18 million in 2020-21 to just 19.96 million in 2023-24. This drop is particularly striking, given that states like Bihar (22.05 million) and Jharkhand (24.15 million) surpassed Madhya Pradesh in 2023-24, despite having smaller allocations or capacities. Uttar Pradesh has led consistently in absolute numbers, ranging between 39.3 million and 56.33 million annually.

 

Tamil Nadu’s ability to generate high persondays despite a smaller rural population highlights the effectiveness of its decentralised planning, proactive mobilisation, and consistent fund utilisation. Unlike other states where distress often drives demand, Tamil Nadu’s success appears rooted in administrative design and delivery.

 

Inclusion and participation: Women and marginalised groups 

 

Tamil Nadu, under the MGNREGA, has consistently led the country in women’s participation. Over the past four years, women have accounted for over 80 per cent of persondays in the state — peaking at 86.66 per cent in 2023-24.

 

This contrasts sharply with Jharkhand, Bihar, Uttar Pradesh, and Madhya Pradesh, where female participation has remained below 55 per cent each year. “Agricultural work in Tamil Nadu is even more feminised now,” Vijayabaskar noted. 

 

“That reflects in the composition of workers, where older women have emerged as the most active demographic,” he said.

Participation by Scheduled Castes (SCs) and Scheduled Tribes (STs), however, has been more subdued across all five states. In Tamil Nadu, SC participation has remained relatively steady at around 27 per cent, while ST participation has stayed under 2 per cent — consistent with the state’s demographic profile. Jharkhand and Madhya Pradesh report higher ST participation, exceeding 20 per cent and 30 per cent, respectively, but across the board, participation by marginalised castes has not shown any significant upward trend.

 

The data points to a broader implementation gap in ensuring that the MGNREGA reaches all eligible social groups at scale.

Tamil Nadu’s trajectory in this underscores how state capacity can shape outcomes in a demand-driven welfare programme. Its consistent record across fund absorption, employment generation, and women’s participation reflects the strength of its administrative machinery — from decentralised planning to local-level execution.