EconomyGS2+ GS3

Supreme Court praises repealed rural employment law, questions successor scheme

The Hindu·2026-08-22· Read original

"Supreme Court praises repealed rural employment law, questions successor scheme"

Prelims Facts

  • •MGNREGA (2005) guaranteed 100 days of unskilled manual work per rural household per year.
  • •Centre-State funding ratio under MGNREGA was approximately 90:10; under the successor VB-G RAM G Act it is 60:40.
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Key Terms

Demand-driven scheme

a welfare programme where entitlement is triggered by the beneficiary's request, not administrative allocation.

Rights-based framework

a policy design where beneficiaries have a legal entitlement enforceable in court, not a discretionary benefit.

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Study Note

BackgroundCore Concept

Background

The Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA), enacted in 2005, was one of the largest demand-driven employment programmes in the world. It guaranteed 100 days of unskilled manual work per household per year to rural adults willing to work at the statutory minimum wage. The scheme was rights-based: a rural household had a legal entitlement to work, and the government was obligated to provide it within 15 days or pay an unemployment allowance. Funding was primarily borne by the Centre, with States contributing roughly 10% of the wage cost and a share of material costs, making the overall ratio approximately 90:10 in favour of the Centre.

The constitutional grounding for such a scheme lies in Part IV (Directive Principles of State Policy), particularly Article 41, which directs the State to make effective provision for securing the right to work. The right to work is not a Fundamental Right under Part III of the Constitution. However, courts have progressively expanded Article 21 (right to life) to include the right to a dignified life, and petitioners have argued that employment at minimum wages is a precondition for such dignity. This tension between DPSP aspirations and enforceable fundamental rights has been a recurring theme in Indian constitutional jurisprudence.

MGNREGA also served as a fiscal stabiliser during rural distress. Studies linked it to reduced seasonal migration, improved women's labour force participation, and creation of durable community assets such as ponds, roads, and watershed structures. Its wage rates, notified annually by the Centre, were frequently criticised for falling below State-level minimum wages, creating a legal and ethical controversy that persisted throughout the scheme's life.

The Topic Explained

The rights-based architecture of MGNREGA rested on three pillars. First, demand-driven access: any adult rural worker could register and demand work; the state could not cap enrolment. Second, statutory wage entitlement: wages had to be paid within 15 days; delays triggered compensation. Third, Centre-led financing: the Centre bore the full wage cost and 75% of material costs, limiting the fiscal burden on States.

The replacement scheme, the Viksit Bharat Guarantee for Rozgar and Ajeevika Mission (Gramin) or VB-G RAM G Act, represents a structural departure. It shifts from a demand-driven to a centrally controlled model, where the Centre determines the volume and nature of work rather than responding to worker demand. The guaranteed work days have increased from 100 to 125 per household annually, but the funding ratio has changed from 90:10 to 60:40, tripling the financial burden on States. …

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Related PYQs

2021GS1 Prelims

With reference to Indian judiciary, consider the following statements:

1.Any retired judge of the Supreme Court of India can be called back to sit and act as a Supreme Court judge by the Chief Justice of India with prior permission of the President of India.

2.In India, any High Court has the power to review its own judgement as the Supreme Court does.

Which of the statements given above is/are correct?

A1 only
B2 only
C1 and 2 both
DNeither 1 nor 2
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2019GS1 Prelims

With reference to the Constitution of India, consider the following statements:

1.No High Court shall have the jurisdiction to declare any central law to be constitutionally invalid.

2.An amendment to the Constitution of India cannot be called into question by the Supreme Court of India.

Which of the statements given above is/are correct?

A1 only
B2 only
CBoth 1 and 2
DNeither 1 nor 2
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Practice MCQs

Politymedium

With reference to the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA), consider the following statements:

1.It guaranteed 100 days of unskilled manual work per rural household per year on a demand-driven basis.

2.The Centre bore approximately 90% of the wage cost, with States contributing the remaining 10%.

3.The right to work guaranteed under MGNREGA was a Fundamental Right under Article 21 of the Constitution.

Which of the statements given above is/are correct?

A1 and 2 only
B2 and 3 only
C1 and 3 only
D1, 2 and 3
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Polityeasy

Which of the following best describes the constitutional status of the 'right to work' in India?

AIt is a Fundamental Right enforceable under Article 32.
BIt is a Directive Principle under Article 41, directing the State to make effective provision for securing the right to work.
CIt is a legal right guaranteed under Article 21 as interpreted by the Supreme Court in all circumstances.
DIt is a constitutional right under Article 19(1)(g) which guarantees the right to practise any profession.
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Politymedium

Consider the following statements regarding the Viksit Bharat Guarantee for Rozgar and Ajeevika Mission (Gramin) or VB-G RAM G Act, the successor to MGNREGA:

1.It increases the guaranteed work days from 100 to 125 per household annually.

2.The Centre-State funding ratio shifts from 90:10 under MGNREGA to 60:40 under the new Act.

3.It retains the demand-driven, rights-based framework of MGNREGA.

Which of the statements given above is/are correct?

A1 only
B1 and 2 only
C2 and 3 only
D1, 2 and 3
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Polityhard

In the context of labour rights jurisprudence in India, the Supreme Court held in Peoples Union for Democratic Rights v. Union of India (1982) that:

AThe right to work is a Fundamental Right enforceable under Article 21.
BPayment of wages below the statutory minimum wage for compelled work constitutes forced labour under Article 23.
CStates are bound to provide employment to all rural adults under Article 41 of the Constitution.
DThe right to livelihood is not part of the right to life under Article 21.
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Polityhard

Consider the following assertion and reason:

Assertion (A): A shift from a demand-driven to a centrally controlled rural employment scheme can reduce actual employment generation even if the guaranteed work days per household are increased.

Reason (R): In a demand-driven scheme, the volume of employment is determined by worker need; in a centrally controlled scheme, it is determined by administrative allocation and State fiscal capacity.

Which of the following is correct?

ABoth A and R are true, and R is the correct explanation of A.
BBoth A and R are true, but R is not the correct explanation of A.
CA is true but R is false.
DA is false but R is true.
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