India's Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA), enacted in 2005, stands as a unique and ambitious program, unparalleled by few globally, designed to guarantee employment for its rural population. This legislation entitles any adult in rural India who demands work to a job on local public works within 15 days. Failing this, the government is legally obligated to provide an unemployment allowance.
MGNREGA has generated approximately 2 billion person-days of work annually, benefiting around 50 million households. A significant portion of the workforce under this scheme comprises women, accounting for over half of all workers, with approximately 40% belonging to Dalit and tribal communities. For a nation where a large population depends on seasonal farm work, MGNREGA has played a crucial role in stabilizing incomes, increasing rural wages, empowering women, and reducing internal migration. It allows households to demand up to 100 days of paid work at a legally mandated minimum wage, transforming employment into an enforceable right.
However, India's Prime Minister, Narendra Modi, has replaced this rights-based system with a centrally managed welfare scheme, a move opposed by economists like Joseph Stiglitz and Thomas Piketty. This shift centralizes power, granting the central government greater control over the scheme's application, funding, and financial risk, which are now shifted to the states. Under this new plan, the failure to provide work is no longer illegal if the scheme is "switched off".
Critics argue that this new plan centralizes power while simultaneously offloading responsibility. Economist Jean Drèze, an architect of MGNREGA, contends that the new plan is akin to "providing a work guarantee without any guarantee that the guarantee applies". Other scholars, opposition parties, and civil society members have also voiced concerns, stating that the new law, passed on December 18, effectively scraps the core promise of the original act by offloading costs to states, controlling funding caps, and centralizing control away from local officials.
The changes to MGNREGA have sparked worries about the future of employment opportunities and the potential impact on the country's poorest households. Thomas Piketty described the shift as reflecting a government that cares more about its "top business friends than about the poor and middle classes of India". As India grapples with unemployment and a large portion of its population relies on agricultural work, the modifications to MGNREGA could have far-reaching consequences for the rural economy and the livelihoods of millions.
