The Parliament has recently passed bill related to National Employment Act repealing the 2009 act. The new legislation guarantees 125 of days of work in each financial year, whereas the old Act only guarantee 100 days of work. New Bill has changed significant such provision but also retained some. This article explains and examines what has been changed and what has been retained. Also, critically compare both the scheme as whether the new legislation strengthens the right to employment in practice.
Introduction
In the heart of rural India where seasonal unemployment affects millions employment schemes play critical role in livelihood. In order to provide that many programs were initiated by the Government of India. Such as National Rural Employment Programme, Rural Landless Employment Guarantee Programme, Jawhar Rozgar Yojana and Sampoorna Gramin Rozgar Yojna.
Under Sampoorna Gramin Rojgar Yojana (SGRY) there is no guarantee that employment will be available on demand as SGRY is an allocation-based programme. Which mean Centre fixed allocation of fund and foodgrains for each state. That means work will be given when it gets allocated to States and then to respective Panchayats leaving no legal guaranty of work. It was necessary to secure at least minimum days of employment. To address this issue in 2005 The Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) was introduced creating World’s largest employment guarantee scheme.
The 2025 Repeal and New Legislative Framework
In the dramatic turn on the midnight of 19 December 2025 in the concluding hour of the winter session Parliament repealed the act as Rajya Sabha passed the Bill, VB-G RAM G at 12:32, reportedly when opposition was absent. This Bill has changed substantial farmwork yet retained some of the provision of the 2005 Act.
- Name: Originally the National Rural Employment Guarantee Act was in 2009 named as Mahatma Gandhi National Rural Employment Guarantee Act (MGNERGA). Now the new bill’s title is Viksit Bhart Guarantee for Rozgar and Ajeevika Mission Gramin (VB-G-RAM-G).
- Days of employment: To align with “national vision of Viksit Bharat by 2047” this bill has proposed to guarantee 125 days work from 100 days of work in each financial year to adults willing to register for unskilled manual work.
- No work Period: Under section 6 of the Bill the State Government shall distinctly notify for different location in advance about No work period of total 60 days considering Agriculture activities such as harvesting, sowing etc. To avoid non availability of manual labour in peak agriculture season.
- Centre State ratio: Under section 22 of the bill fund sharing pattern between the central Government and the State Governments shall be 90:10 for the North Eastern States, Himalayan States and Union territory. Herein Union territory is limited to only Uttarakhand, Himachal Pradesh and Jammu and Kashmir. For all other States and Union Territories Central will bear the 60% and State will bear 40% of the funding. If any expense exceeds standard allocation allotted by Central the State will bear the that expenditure.
- Allocation of the work : The Central Government first determines the State wise normative allocation, which fixes the financial limit for the number and scale of work. Based on this allocation, the State Government receives funds and notifies its Scheme under the Act. The State Government, through the District Programme Coordinator, combines the work plans prepared by the Block and Gram Panchayats and gives the required administrative and financial approval. The Programme Officer at the Block level checks what work has been approved and assigns it to people who have asked for work. Finally, the Gram Panchayat allocates specific work to individual applicants who have demanded employment.
Retained Provisions
State Responsibility: If the applicant is not provided such work within 15 days of the receipt of the work the person shall receive allowance called as unemployment allowance.
Drawbacks of MGNREGA scheme
Nearly 65% people of 1.4 billion of Indian Population live in rural areas. Although this scheme guarantees 100 days of employment but in reality, it failed to achieved that outcome. A recent 2025 report by LibTech India, an advocacy group, found that only 7% of rural household working on the scheme actually received the 100 days of work in 2023-2024.
Using section 27 of the MGNREGA act Union Government in 2021, withhold MGNREGS funds for West Bengal alleging embezzlement. Scheme was suspended for almost 3 years and recently Calcutta High court directed to resume the Scheme. Also, the Supreme Court on October 2025 dismissed a petition filed by the Union Government challenging an order of the Calcutta High Court directing the prospective implementation of the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) scheme in the State of West Bengal, saying “The scheme of the act does not envisage a situation where it would be put to cold storage for eternity.”
Critical Comparison between both the scheme
United Nation hailed NEREGA scheme and also asked another nation to emulate the program that has helped the nations marginalised communities. Over 26 crore registered workers exist in the Scheme. And the Act prescribes that priority of employment shall be given to women and due to that now consisting around 50% participation are of women now. This current shift of responsibility from Centre to State has to face 40% financial burden. It threatens the existence of the right of employment.
Unlike earlier allocation-based schemes, MGNREGA introduced a demand-driven framework, transforming employment from a discretionary welfare measure into a limited statutory right. To remove the drawbacks from the Act the next step would be effective implementation. Switching off the demand driven right would amount to step backward not progress.
There are several advantages of Demand driven employment which also aligns with article 21 and 41. Such scheme also enhance negotiation power and reduce distress migration. In COVID 19 over 389 crores induvial registered for the work in their own village which highlights scheme’s role in time of crisis.
Before MGNREGA, distress migration, that is migration because of less work in that area, was high. After the scheme started in 2006, migration reduced significantly. Overall migration fell by about 28%, and migration for the purpose of work dropped by nearly 59%. Also, migration from illiterate households declined by around 32%. Further because of the wage rate fixed under the act workers has the opportunity of choice which enhances power of negotiations in respective labour market.
Article 41 directs the State to endeavour to secure the right to work, education, and public assistance in situations such as unemployment, sickness, old age, and disability, subject to its economic capacity. This provision shows the constitutional commitment to social welfare and reflects the idea of human dignity, as interpreted by Article 21 by judicial interpretation. Employment schemes under this article should reflect the right to live with dignity. Considering this, changing the name of the Act would serve a less substantive purpose and would only increase administrative and financial costs. A more effective approach would be to address existing shortcomings through targeted amendments rather than symbolic renaming or complete change.
Conclusion
The evolution of rural employment schemes in India reflects a gradual shift from discretionary, allocation-based welfare programmes to a rights oriented, demand-driven framework under MGNREGA. While the scheme has faced undeniable implementation challenges but also data demonstrates its positive impact on rural wages, distress migration, women’s participation, and livelihood security. The 2025 legislative changes, particularly the increased financial burden on States and the dilution of the demand driven structure, risk right to employment. Constitutional principles under Articles 21 and 41 direct the State to ensure effective functioning of the scheme in practice, not merely to redesign the welfare scheme symbolically. Rather than repealing the Act, strengthening accountability and improving implementation would be better to serve the constitutional promise.
Reference:
- Mahatma Gandhi National Rural Employment Guarantee Act 2009
- Viksit Bhart Guarantee for Rozgar and Ajeevika Mission Gramin Bill 2025
- Union of India v. Paschim Banga Khet Mazdoor Samity, Diary No. 42326 of 2025.
- LibTech India, MGNREGA Tracker FY 2024–25 (2025), available at:
https://cordindia.com/wp-content/uploads/2025/06/LibTech_India_Tracker_FY-2024-25-English.pdf - An Open Letter to the Indian Government in Support of the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA), Levy Economics Institute, available at:
https://www.levyinstitute.org/an-open-letter-to-the-indian-government-in-support-of-mgnrega/
Author Name- Ganesh Nanandkar, Government Law College, Mumbai
