The Mahatma Gandhi Rural Employment Guarantee (MGNREGA or NREGA) is the largest rights-based public employment program in the world, signed into law in 2005. It faces imminent repeal by the Indian government, which intends to replace it with the Viksit Bharat – Guarantee for Rozgar and Ajeevika Mission (Gramin) VB – G RAM G Bill (2025). These changes primarily consist of consolidating authority over the program in the central government while transferring greater and likely unsustainable obligations for administration and payment to the states.
Please read the open letter and add your name to the list of experts below calling for the preservation of the NREGA law.
An Open Letter to the Indian Government in Support of the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA)
We, the undersigned scholars, policymakers, lawyers, and civic actors (all friends of India), write to express profound concern regarding the imminent repeal of the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA). We urge a recommitment to this landmark legislation, which stands as the world’s most significant policy operationalizing a demand-driven, legal right to employment.
Originally passed with unanimous parliamentary support, MGNREGA transcends political lines. Its foundational principle — that the national government must guarantee an employment safety net — affirms economic dignity as a fundamental right. Empirical evidence underscores its impact.
MGNREGA routinely generates over 2 billion person-days of work annually for some 50 million households, with transformative equity: more than half of all workers are women, and about 40% are from Scheduled Castes or Tribes. The early years of the Act coincided with unprecedented rural wage growth, and studies confirmed the program’s positive effects on economic output and efficiency, dispelling myths of unproductivity.
However, chronic underfunding and payment delays have long hampered implementation. The current shift to devolve the scheme to states and without commensurate fiscal support, now threatens its existence. States lack the central government’s financial capacity. The new funding pattern creates a catastrophic Catch-22: states bear legal liability for providing employment, while central financing is withdrawn. Previously contributing only 25% of material costs, states now face burdens of 40% to 100% of total costs, ensuring poorer states will curb project approvals, directly stifling work demand.
This structural sabotage is compounded by discretionary “switch-off” powers, which allow the scheme to be suspended arbitrarily and render the guarantee meaningless. The unexplained defunding of West Bengal in the last three years exemplifies this political misuse. The new framework institutionalizes this risk, imposing unfunded mandates on states without consultation.
MGNREGA’s demand-driven design not only provides wages but also builds vital rural assets such as wells, roads, ponds, stimulating local economies. By making projects financially untenable for states, these multiplier effects are extinguished.
MGNREGA has captured the world’s attention with its demonstrated achievements and innovative design. To dismantle it now would be a historic error. It would abandon a proven instrument for poverty alleviation, social justice, and care for the environment. We call for its restoration through assured central funding, timely wages, and an unequivocal return to its foundational guarantee of the right to work.
The Levy Economics Institute has drafted this letter of support, signed by the following experts:
- Olivier De Schutter, UN Special Rapporteur on Extreme Poverty and Human Rights
- Isabelle Ferreras, Research director FNRS, Professor University of Louvain (UCLouvain), Senior research associate Center for Labor and a Just Economy, Harvard Law School
- James Galbraith, Lloyd M. Bentsen Jr. Chair in Government/Business Relations at the Lyndon B. Johnson School of Public Affairs, The University of Texas at Austin, USA
- Darrick Hamilton, Henry Cohen Professor of Economics and Urban Policy, New School for Social Research, USA
- Mariana Mazzucato, Professor and Founding Director of the University College London, Institute for Innovation and Public Purpose
- Thomas Piketty, Professor, EHESS and the Paris School of Economics, Co-director, World Inequality Lab & World Inequality Database
- Joseph E. Stiglitz, University Professor and Nobel Laureate, Columbia University, USA
- Pavlina R. Tcherneva, President and Professor of Economics, The Levy Economics Institute of Bard College, USA
- Imraan Valodia, Professor of Economics, University of Witwatersrand, South Africa
- Randall Wray, Professor and Senior Scholar, The Levy Economics Institute of Bard College, USA
Add your name to the list of experts in support of this letter.