Government’s Legislative Changes Redefine MGNREGA Structure The new law caps central allocations and limits guaranteed workdays per state, shifting any excess expenditure entirely onto state budgets[1]. It replaces the uncapped funding model with a predetermined budget, reducing the scheme’s responsiveness to local demand[1]. Planning authority moves from Gram Sabhas to the PM GatiShakti National Master Plan, centralising decision‑making[1]. Although the government advertises an increase from 100 to 125 guaranteed days, analysts argue the budget constraints nullify any real expansion of rights[1].

Program’s Scale and Social Impact Remain Massive MGNREGA delivers over 2 billion person‑days of work annually to roughly 50 million rural households, with women comprising more than half of beneficiaries and 40 % drawn from Scheduled Castes or Tribes[2]. Early implementation spurred rural wage growth and helped curb distress migration, especially during the COVID‑19 pandemic when the scheme provided critical income support[2][1]. Scholars cite the program as the world’s largest social‑security initiative, underpinning rural livelihoods and empowering gram panchayats through social audits[1].

Political Opposition and Scholarly Appeal Intensify Sonia Gandhi publicly condemned the Modi government’s “bulldozing” of MGNREGA, warning that the changes threaten constitutional protections and rural livelihoods[1]. An open letter signed by scholars, policymakers, and lawyers urged the government to preserve the law, restore assured central funding, and maintain the right to work[2]. Critics highlight discretionary “switch‑off” powers that have already led to defunding in West Bengal, illustrating political misuse of the scheme[2].

Fiscal Risks Threaten Poorer States Under the proposed reforms, states could be responsible for 40 % to 100 % of total program costs, creating a “catch‑22” where they must provide employment without central financing[2]. This fiscal pressure is expected to force poorer states to curtail project approvals and reduce work demand, undermining the scheme’s core guarantee of employment[2]. The shift to a capped budget and state‑borne expenses is seen as a major weakening of the program’s financial sustainability[1].