Requests 12% Increase While Demand post-Pandemic Decreases; Future of Scheme Depends on Evaluation from 2026 and Beyond
New Delhi, 2 June 2025
The Ministry of Rural Development has requested ₹5.23 lakh crore for the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) 2025–30 from the Government. This represents a 12% increase over what was allocated for the prior 5-year period.
Launched in 2006, the MGNREGS provides up to 100 days of unskilled manual work to rural households each year under law. The MGNREGS is a program that helps support the poor in rural settings, as it is primarily a wage subsidy scheme. The scheme gained maximum uptake in 2020–21 thanks to the COVID-19 pandemic which constituted ₹1.09 lakh crore and 7.55 crore families benefitted from the plan.
Demand of the program has decreased since COVID (in 2024-25, 5.79 crore households accessed the program), and the total budget has been reduced to ₹85,680 crore. Notably, the Ministry of Rural Development has retained the current cost-sharing arrangement: the Centre funds wages and pays for 75% of material costs; while states pay for unemployment allowance and 25% of the remaining costs.
The scheme remains in suspension in West Bengal since 2022; it is certainly key to generating employment in rural areas and has been recommenced in many other Indian states. The Government of India is reviewing the future of the MGNRGS as part of the 16th Finance Commission cycle; whether it extends their throughput for any time after 2026, depends on the framework for independent third-party evaluations.
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