Activists oppose repeal of MGNREGA, warn of financial strain on States

Opposing the Union government’s decision to repeal the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) and replace it with the Viksit Bharat–Guarantee for Rozgar and Ajeevika Mission (Gramin) (VB-GRAMG) Act, 2025, the MGNREGA workers, representatives of civil society organisations, and legal experts on Friday demanded that the new Act should be scrapped.

They particularly flagged the issue of financial burden of States like Karnataka.

Addressing a press conference organised under the banner of the NREGA Sangharsh Morcha, they said the new law marked a shift from a demand-driven, rights-based employment guarantee to a Centrally-controlled, command-driven scheme, undermining socio-economic justice, and federal principles.

They criticised the manner in which the Act was introduced, debated, and passed within 72 hours. The change would affect more than 26 crore registered MGNREGA workers across the country, the activists said.

Nikhil Dey, founder of the Mazdoor Kisan Shakti Sangathan, said, “The MGNREGA was arrived at through several rounds of discussion and scrutiny by a Parliamentary Standing Committee. This new Act, brought without consultation, is an assault on the right to work,” he said.

Impact on Karnataka

Highlighting the financial implications for Karnataka, economist Vinod Vyasulu said the State had nearly 81 lakh registered MGNREGA households. In 2024–25, about 29 lakh households generated 13.12 crore person days of work, with the State spending ₹573 crore. Under the VB-GRAMG framework, providing the same level of employment would cost Karnataka about ₹2,729 crore a year. Extending work to 125 days for these households would push the cost to over ₹7,573 crore, potentially affecting allocations for health and welfare schemes, he pointed out.

Advocate Clifton D’Rozario pointed out that even under the existing budgetary allocations, the Centre had been unable to ensure 50 days of work per household annually. In that context, the promise of 125 days of employment under the new scheme is  misleading, as the Act capped central allocations and shifted a larger financial burden on States.

Major concerns

Several concerns, including the loss of the legal right to demand work, restriction of employment to only those rural areas notified by the Centre, State-wise caps on workdays, and a revised 60:40 cost-sharing formula that ends the Centre’s responsibility for full wage payments were flagged. The provision barring work for 60 days during peak agricultural seasons was also criticised for weakening the bargaining power of women, landless labourers, and other marginalised groups.