Lok Sabha Question No. 2694 (UNSTARRED), answered on 2025-08-05
Subject: Capping MGNREGS Expenditure
Ministry: RURAL DEVELOPMENT
Asked by: Ms. Mahua Moitra

## GOVERNMENT OF INDIA MINISTRY OF RURAL DEVELOPMENT DEPARTMENT OF RURAL DEVELOPMENT

## LOK SABHA UNSTARRED QUESTION NO. 2694 ANSWERED ON 05/08/2025

## CAPPING MGNREGS EXPENDITURE

## 2694. MsMahuaMoitra:

Will the Minister of RURAL DEVELOPMENT be pleased to state:

- (a) whether  in  light  of  the  Finance  Ministry's  decision  to  cap Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) expenditure at 60% of the Financial Year 2025-26  allocation  during  April-September  a  first  time  move aimed at curbing budget overspend yet potentially undermining this legally guaranteed, demand-driven scheme;
- (b) whether  the  Government  recognises  that  this  cap  may  force denial  of  work  or  delay  wages  violating  the  entitlements provided  under  Section  3  and  Schedule  II,  para  29  of  the MGNREG Act, 2005, and Supreme Court rulings in SwarajAbhiyan vs. Union of India (2016), and PaschimBangaKhetMazdoorSamity vs. West Bengal (1996);
- (c) whether  the  Government  has  assessed  the  risk  of  this  cap disrupting  MGNREGS  role  as  an  automatic  stabiliser  during seasonal and climatic induced rural distress such as the 20% demand spike during the July-August heatwave of 2023;
- (d) the average monthly pending dues cleared in the current and previous financial years and the proportion of the  new allocation that has been used to clear outstanding arrears; and
- (e) whether the Government plans to amend or rescind the cap to ensure compliance with the Act's letter and spirit and uphold the entitlement to 100 days of work and timely  wage payments?

(a),(b), (c) & (e): It  is  stated  that  Mahatma  Gandhi  NREGS  is  a demand driven scheme and the Government of India is committed to making funds available to States/UTs as per demand for employment on the ground. With a view of better financial management and planning, Department of Expenditure, Ministry of Finance vide O.M. dated 29.05.2025 has allowed this Department to spend  upto  60%  of  the  annual  allocation  for  'Mahatma  Gandhi NREGS'  during  the  first  half  (April-September)  of  the  FY  2025-26 subject  to  applicability  of  extant  financial  parameters.  It  may  be noted  that,  the  demand  for  employment  under  Mahatma  Gandhi NREGS experiences seasonal variations and the first quarter of the year  experiences relatively  high  generation  of  Persondays  due  to summer  and  agricultural  lean  season.  The  demand  for  labour generally  declines  with  the  onset  of  monsoon  and  subsequent agricultural activities from the second quarter onwards. Department of  Rural  Development  has  already  approached  the  Department  of Expenditure for allowing release of additional funds on the basis of requirement  of  funds  to  meet  the  demand  for  employment  in  the current financial year.

(d):  As  on  1st  April,  2025  an  amount  of  Rs.  17,259.56  crore  was pending  as  wage  liabilities  and  Rs.  15,641.56  crore  as  material liabilities  for  FY  2024-25.  In  the  beginning  of  FY  2025-26  100%  of pending wage liabilities and 50% of material liabilities have already been released to States/UTs.

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