Decline in Employment and Income under MGNREGS: LibTech India Report

A report released by LibTech India has highlighted a sharp decline in employment generation and worker income under the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) during 2025–26. According to the report, the downturn has raised serious concerns regarding rural livelihoods, wage security, and the effectiveness of India’s social protection system. The year 2025–26 was also significant because it marked the final phase of the scheme before its replacement under the VB-GRAM G Act.

Key Findings of the Report

Registered households under MGNREGS increased by 3.2%, from 14.98 crore in 2024–25 to 15.46 crore in 2025–26, indicating continued demand for rural employment.

Despite higher registration, employment declined sharply

¨     44 lakh fewer households received work.

¨     67 lakh fewer workers were employed, marking a 9.1% decline.

¨     Total person-days generated fell by 21.5%, from 268.44 crore to 210.73 crore.

¨     Average person-days per household dropped from 50.18 to 42.92.

¨     Households completing the guaranteed 100 days of work declined by 40.5%, from 0.37 crore to 0.22 crore.

¨     Wage expenditure fell from ₹67,835 crore in 2024–25 to ₹56,265 crore in 2025–26, despite an increase in average daily wages from ₹252.7 to ₹267.

¨     LibTech estimated an average income loss of ₹1,221 per MGNREGS household due to reduced employment opportunities.

¨     If employment levels had remained unchanged from 2024–25, workers could have earned an additional ₹15,409 crore.

¨     Tamil Nadu recorded the sharpest decline in person-days (42.8%), followed by Haryana, Himachal Pradesh, and Telangana.

¨     Jharkhand registered the highest increase in person-days at 12.9%, followed by Jammu and Kashmir and Odisha.

The report attributed the decline partly to stagnant budget allocations and technological interventions such as

¨     Aadhaar-Based Payment System (ABPS)

¨     National Mobile Monitoring System (NMMS) attendance app

¨     Mandatory eKYC verification

Around 45.4% of all workers and 9.5% of active workers had not completed eKYC by May 2026, affecting access to employment and wage payments. Activists also criticised the transition to the Viksit Bharat–Guarantee for Rozgar and Ajeevika Mission (Gramin) Act 2025 for being introduced without adequate public consultation.

MGNREGS

¨     The Mahatma Gandhi National Rural Employment Guarantee Scheme was launched in 2005 under the UPA government through the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA).

¨     It is a rights-based rural employment programme that guarantees up to 100 days of wage employment annually to every rural household willing to undertake unskilled manual work.

¨     The scheme aims to enhance livelihood security, reduce rural distress, and create durable rural assets.

¨     It is implemented by the Ministry of Rural Development through Gram Panchayats.

VB-G RAM G Act, 2025

¨     In 2025, the government replaced MGNREGA with the Viksit Bharat-Guarantee for Rozgar and Ajeevika Mission (Gramin) Act, commonly known as the VB-G RAM G Act, 2025.

¨     The Act seeks to align rural employment generation with the vision of Viksit Bharat 2047 through an infrastructure-focused and technology-driven framework.

Key Features of the VB-G RAM G Act, 2025

¨     Guarantees 125 days of wage employment annually per rural household.

¨     Integrates employment generation with rural infrastructure development.