Supreme Court’s View on Rural Employment Guarantees
The Supreme Court on 21 August 2026 praised the repealed MGNREGA as a "salutary scheme" that was neither a freebie nor an exploitation of rural workers. At the same time, the Court highlighted serious concerns about its successor, the VB‑GRAM Act.
Key Developments
- Chief Justice Surya Kant called MGNREGA "effective" and "pan‑India".
- Civil‑rights groups claim the new law has cut employment generation by about 50 % despite raising guaranteed work days from 100 to 125 per household.
- The funding share for states has risen from a 90:10 to a 60:40 ratio, tripling the fiscal burden on states.
- Activist Aruna Roy petitioned for payment of delayed wages and for elevating the employment guarantee to a fundamental right under Article 21.
- Advocates argued that a wage below the minimum wage amounts to forced labour.
Important Facts
• Under MGNREGA, each rural household was guaranteed 100 days of wage work per year. The new law raises this to 125 days.
• The shift from a demand‑driven, rights‑based model to a centrally‑controlled scheme has reduced the role of local Gram Panchayats in job allocation.
• States now fund 40 % of the scheme’s cost, up from 10 % earlier, leading to fiscal strain and reported drops in worker rolls by 67.6 lakh in the first fortnight after transition (LibTech report).
• The first instalment of ₹25,863 crore has been released under the VB‑GRAM Act.
Exam Relevance
Understanding this debate is crucial for GS‑2 (Polity) and GS‑3 (Economy). It touches upon:
- The role of the Supre