India's ambitious legal right to work for its rural poor is being systematically dismantled by Prime Minister Narendra Modi's government, a move economists and activists warn could ignite significant social unrest. The transformation of the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) from a rights-based entitlement to a discretionary welfare scheme represents a profound shift in India's social contract.
From Legal Right to Discretionary Scheme
Enacted in 2005, MGNREGA was a globally unique programme. It guaranteed any adult in rural India 100 days of paid work on local public projects within 15 days of requesting it. If the government failed to provide work, it was legally obliged to pay an unemployment allowance. The scheme created 2 billion person-days of work annually for approximately 50 million households, with over half the workers being women and around 40% coming from Dalit and tribal communities.
The programme stabilised incomes in a nation reliant on seasonal farm labour, raised rural wages, and crucially expanded women's economic bargaining power. Despite initial criticism, even the World Bank later praised its "stellar" results. Now, the Modi administration has replaced this system with the centrally managed VB-G RAM G model.
A 'Guarantee' Without the Guarantee
This overhaul, opposed by Nobel laureate Joseph Stiglitz and scholar Thomas Piketty, centralises power in New Delhi while offloading financial risk onto India's states. The central government now has discretion over when and where the scheme operates, can cap funding, and states bear the liability if costs overrun. As MGNREGA's architect, economist Jean Drèze, argues, the change means "failure to provide work is no longer illegal." He describes it as "providing a work guarantee without any guarantee that the guarantee applies."
While the old system faced issues with inefficiency and corruption, critics insist the solution was reform, not effective repeal. Poorer states, now facing new financial liabilities, may simply ration access to avoid paying out, leaving the most vulnerable without a crucial safety net.
Echoes of a Failed Political Gamble
Remarkably, Mr Modi is employing a similar political strategy that backfired dramatically just a few years ago. In 2020, his government passed three contentious farm laws aimed at deregulating agriculture. After year-long mass protests, led in part by women, the laws were repealed in 2021. Farmers were enraged that protections they depended on were removed without consultation.
The Prime Minister miscalculated by assuming farmers would see market "freedoms" as opportunities rather than threats. Repeating this top-down approach with the rural jobs guarantee, which directly impacts even more households, appears politically foolhardy. As with the farm protests, women's prominent role in MGNREGA could transform a technocratic policy dispute into a potent moral reckoning.
The timing is electorally sensitive. States like Rajasthan, Madhya Pradesh and Maharashtra are both drought-prone and politically pivotal. They face regional polls in 2028 and 2029. A weak monsoon in 2026-27 could see rural distress accumulate under the new, limited scheme. Under the old system, rising demand for jobs automatically triggered increased supply, diffusing political blame. Under the new plan, any denial of work will point directly at the central government in Delhi.
Jean Drèze is now supporting grassroots movements to defend the right to work. The scheme's potency lies with the female workers who learned, through MGNREGA, to claim wages and work as a right, not charity. If work is denied due to new central government caps, a powerful alliance of discontent in the courts, state governments, and on the streets could align once more, posing a serious challenge to Modi's political agenda.
