MGNREGS Brought Under Spending Cap

• 13 Jun 2025

In June 2025, for the first time, the Finance Ministry has capped spending under the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) at 60% of its annual allocation for the first half of FY 2025–26, bringing it under the Monthly/Quarterly Expenditure Plan (MEP/QEP).

Key Points

• Historic Cap Introduced: MGNREGS, a demand-driven rural jobs scheme, will now follow fixed spending limits—up to Rs. 51,600 crore (60% of Rs. 86,000 crore annual budget) for the first half of 2025–26.
• Pending Liabilities Impact: Around Rs. 21,000 crore in dues from 2024–25 must be cleared, limiting funds available for new work generation.
• Persondays Target: The MoRD has approved 198.86 crore persondays for 2025–26, with 67.11% projected in the first half.
• Fund Release So Far: As of June 8, 2025, the Centre has released Rs. 24,485 crore—28.47% of the total allocation.
• Declining Beneficiaries: The number of families availing work under MGNREGS has dropped annually since its COVID-19 peak of 7.55 crore in 2020–21 to 5.79 crore in 2024–25 (excluding West Bengal).
• Finance Ministry's Concern: Officials have questioned the large carryover liabilities, citing legal requirements under the MGNREGA Act, 2005, to clear wages within 15 days.