Context:
- The Garib Kalyan Rozgar Abhiyaan Mission (GRAMG) Act, 2025, proposed to replace the two-decade-old MGNREGA, has been passed by Parliament amid concerns over its design, funding structure, and federal implications.
- While projected as a reform to address rural employment needs, the Act raises questions regarding fiscal sustainability, Centre–State relations, and implementation capacity, especially for cash-strapped States.
Key Highlights:
Background: MGNREGA Framework
- MGNREGA (2005) guarantees 100 days of wage employment to rural households.
- Key features:
- Demand-driven entitlement
- Centre–State cost sharing (wages largely by Centre; materials shared)
- Legal guarantee with transparency mechanisms
- Plays a crucial role during agrarian distress and lean agricultural seasons.
Features of GRAMG Act, 2025
- Introduces new funding and operational mechanisms.
- Proposes revised cost-sharing patterns between Centre and States.
- Shifts from MGNREGA’s demand-driven model towards more structured allocations.
- Seeks to rationalise expenditure and improve efficiency.
Fiscal Implications
- Significant additional fiscal burden on States.
- Estimates suggest:
- Higher State share in wages and materials.
- States with weaker finances (e.g., Bihar, Jharkhand, Rajasthan, UP) may struggle.
- Concerns that States may delay implementation or reduce coverage due to budgetary stress.
Centre–State Relations
- MGNREGA allowed States flexibility in responding to local employment demand.
- GRAMG’s design may:
- Reduce State autonomy
- Increase dependence on Centre’s fiscal priorities
- Raises questions under cooperative federalism.
Transition Challenges
- Managing the shift from MGNREGA to GRAMG:
- Administrative restructuring
- Capacity-building at local levels
- Ensuring uninterrupted wage payments
- Risk of exclusion errors during transition phase.
Stakeholders Involved
- Ministry of Rural Development
- State Governments
- Panchayati Raj Institutions
- Rural workers and households
Significance / Concerns
- Potential dilution of legal employment guarantee.
- Risk of undermining a proven social safety net.
- Fiscal stress may widen regional disparities in employment generation.
Relevant Prelims Points:
- Issue: Replacement of MGNREGA by GRAMG Act
- Causes:
- Rising fiscal burden
- Demand for reform in rural employment schemes
- Government Initiatives:
- GRAMG Act, 2025
- Rural employment restructuring
- Benefits Claimed:
- Improved efficiency
- Rationalised funding
- Challenges:
- State fiscal capacity
- Transition management
- Impact:
- Possible reduction in guaranteed rural employment
Relevant Mains Points:
- Facts & Provisions:
- MGNREGA – demand-driven, legal guarantee
- GRAMG – revised cost-sharing and implementation framework
- Conceptual Clarity:
- Cooperative federalism
- Welfare vs fiscal discipline
- Rights-based vs scheme-based approach
- Keywords:
- Rural employment
- Fiscal federalism
- Social safety net
- Demand-driven welfare
- Way Forward:
- Phased and consultative transition
- Adequate Central fiscal support
- Protect legal guarantee of employment
- Strengthen Panchayati Raj capacity
- Continuous monitoring to prevent exclusion
UPSC Relevance (GS-wise):
- GS Paper II: Welfare schemes, Centre–State relations
- GS Paper III: Inclusive growth, public finance
- GS Paper I: Rural society and livelihoods
- GS Paper IV: Ethics – social justice and state responsibility