Rural ministry seeks 12% hike in outlay of Rs 5.23 lakh crore for MGNREGS over 5 years
New Delhi, June 2, 2025 — The Ministry of Rural Development has proposed a 12% increase in the budget for the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS). The plan seeks an outlay of ₹5.23 lakh crore over the next five years. It aims to boost rural employment, ensure faster wage payments, and support infrastructure development in villages.
This proposal highlights the government’s focus on reviving rural livelihoods, especially after recent economic and climate challenges.
MGNREGS: A Key Rural Lifeline
Launched in 2006, MGNREGS offers 100 days of guaranteed wage employment each year to rural households that seek unskilled manual work. Over time, it has become a critical support system for millions. It also contributes to building assets like roads, canals, and water conservation systems.
The ministry believes that the ₹5.23 lakh crore budget will help strengthen these efforts over the next five years.
Why the 12% Hike Is Necessary
Officials say demand for work under MGNREGS remains high, especially in poorer states. The previous five-year budget of ₹4.67 lakh crore often failed to meet actual demand. As a result, wage delays, cost overruns, and inflation became recurring issues.
A senior official noted that rural workers rely heavily on MGNREGS. Delays and job shortages undercut the scheme’s purpose. The proposed hike would help fix these issues and improve the program’s delivery.
What the New Outlay Covers
The ₹5.23 lakh crore budget will address several priorities:
1. Faster Wage Payments
The government plans to upgrade payment systems. It wants to ensure workers receive wages on time through direct benefit transfers.
2. Better Coverage of Material Costs
Costs of bricks, tools, and cement have risen. The new budget accounts for inflation, helping maintain the quality of work and assets.
3. Wage Rate Revisions
In many states, MGNREGS wages are lower than minimum wages. The ministry plans to revise wage rates to reflect local costs of living.
4. Support for Eco-Friendly Projects
Funds will be used for climate-resilient projects. These include water conservation, land development, and afforestation—projects that offer long-term rural benefits.
5. Focus on Skill Building
The government may include semi-skilled tasks in MGNREGS. This step would help workers build new skills while improving asset quality.
Mixed Reactions from Experts
Development experts have welcomed the proposal. Dr. Meera Singh from the Institute of Rural Studies said the increase is timely, given the growing rural distress. She added that success will depend on how efficiently the funds are used.
However, some experts warned about past issues. These include fund misuse, corruption, and poor implementation. They stress the need for better monitoring and coordination with state governments.
Political and Social Impact
The proposed hike may also have political significance. MGNREGS enjoys strong support among rural voters, especially women, marginalized communities, and small farmers.
With general elections approaching, a stronger MGNREGS could help the government build goodwill and address rural distress.
What Comes Next
The Finance Ministry is reviewing the proposal. If approved, the allocation will be part of the Union Budget 2025–26. This could become the largest five-year commitment to rural employment in India’s history.
The ministry hopes the increased funding will do more than offer jobs. It wants to build stronger, self-reliant rural communities.
