How long will the rural job guarantee scheme that promises 100 days of work to unskilled workers willing to engage in physical labour continue in its present form? This question has triggered serious concern in Kerala and several other states as proposed changes to the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) raise fears of funding cuts and tighter Central control.

Implemented by the UPA government as a poverty alleviation measure, MGNREGS has become a key livelihood source for lakhs of people, including large numbers of women. The state government alleges that the BJP-led Centre is making a “deliberate move” to weaken the scheme by cutting budgets and delaying wage payments.

Budget cuts 

According to official figures, Kerala’s labour budget was 7.5 crore persondays in 2021–22. From 2022–23 to 2024–25, it was reduced to 6 crore, and further cut to 5 crore for 2025–26. In 2023–24, the Centre later approved 10.5 crore persondays.

Last year, while only 6 crore persondays were sanctioned, the state generated 9.07 crore. This year, against an approval of 5 crore persondays, Kerala has already provided 5.53 crore. Under the proposed Bill, the Centre will not reimburse the excess expenditure incurred this year.

Will panchayats be sidelined?

The state has also opposed a provision under which the Centre would decide which panchayats are eligible, even as the number of guaranteed workdays is proposed to be raised to 125. Kerala fears this could be misused to favour panchayats aligned with the ruling party at the Centre.

Another objection relates to the proposed steering committee, formed in addition to the State Employment Guarantee Council, which would include a Central Government representative. The state views this as increased central interference. Under the existing system, administrative lapses did not affect wage disbursal. The new Bill, however, allows funds to be withheld.

How will finances be hit?

MGNREGS is based on the principle that employment is a legal right, guaranteeing at least 100 days of work to any household that demands it. The state alleges that this core idea has been diluted.

So far, states could provide work based on actual demand. Under the new framework, the Centre will fix a state’s annual allocation using various parameters. Any spending beyond this limit will have to be borne by the state.

This effectively means Kerala will be unable to provide additional workdays. The state spends an average of Rs 4,000 crore annually on the scheme. Under the new provisions, Kerala would have to bear 40 per cent of the total expenditure.