Fake Demand Under MGNREGS Won’t Be Entertained: Government

Context:

• The Union Government has assured a Parliamentary Standing Committee on Rural Development that it will prevent ‘fake demand’ for work during the transition from MGNREGA to the newly enacted Viksit Bharat – Guarantee for Rozgar and Ajeevika Mission (Gramin) (VB–G RAM G) Act, 2025.

• The assurance comes amid concerns over disruption of rural employment, pending dues to States, and the credibility of demand generation mechanisms.

Key Highlights:

Policy Transition and Oversight:

• MGNREGA was repealed on December 18, and replaced by the VB–G RAM G Act, 2025.

• The Parliamentary Standing Committee, chaired by Saptagiri Ulaka, reviewed preparedness during the transition phase.

• Samajwadi Party MP Ramashankar Rajbhar raised concerns over how genuine demand would be handled and misuse prevented.

Government’s Stand on ‘Fake Demand’:

• The Ministry of Rural Development stated it is actively coordinating with States to ensure that only genuine demand for work is recorded.

• Emphasis was placed on preventing artificial inflation of job demand, a criticism frequently raised against MGNREGS implementation.

Financial Liabilities and State Coordination:

• The Union Government owes ₹3,082.52 crore to States, including:

  • ₹1,457.22 crore as pending wages for completed work by registered workers.

• The Centre confirmed it is in touch with West Bengal to resolve pending dues, though no timelines or amounts were specified.

West Bengal Funding Issue:

• Funds to West Bengal were stopped in March 2022 under Section 27 of the MGNREGA Act, 2005, citing non-compliance with Central directives.

• The issue highlights Centre–State tensions in scheme implementation and accountability.

Debate on Relevance of Rural Employment Schemes:

• Some BJP members argued that with schemes providing free food and healthcare, the need for a large-scale rural employment programme has diminished.

• This view contrasts with concerns over rural distress, migration, and employment insecurity.

Objectives of VB–G RAM G Act, 2025:

• Aims to provide enhanced livelihood opportunities, going beyond short-term wage employment.

• Focus on sustainable rural livelihoods, skill development, and convergence with other welfare schemes.

Relevant Prelims Points:

• MGNREGS: Guarantees 100 days of wage employment to rural households willing to do unskilled manual work.

• VB–G RAM G Act, 2025: Replaces MGNREGA to provide broader livelihood security.

• Section 27, MGNREGA Act, 2005: Allows Centre to stop fund release for State non-compliance.

• Issue: Managing genuine demand during scheme transition.

• Impact:

  • Risk of wage delays

  • Employment disruption if coordination fails

Relevant Mains Points:

• Facts & Provisions:

  • Repeal of MGNREGA marks a major shift in rural employment policy.

• Conceptual Clarity:

  • Demand-driven schemes require transparent and verifiable demand registration.

  • Transition phases are vulnerable to exclusion errors and fund bottlenecks.

• Concerns:

  • Pending wage liabilities

  • Centre–State trust deficit

  • Risk of excluding poorest households

• Way Forward:

  • Clear transition guidelines for States

  • Time-bound clearance of dues

  • Robust digital and social audit mechanisms

  • Ensuring livelihood security alongside welfare convergence

UPSC Relevance (GS-wise):

• GS 2: Governance, Social Justice, Welfare Schemes, Centre–State Relations

• GS 3: Rural Economy, Employment, Public Finance