Rural ministry seeks 12% hike in outlay of Rs 5.23 lakh crore for MGNREGS over 5 years

By | 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) over five years. The current allocation is Rs 5.23 lakh crore. This hike aims to strengthen the scheme’s ability to provide wage employment and improve rural infrastructure.

Why Increase the MGNREGS Budget?

MGNREGS was launched in 2005 to guarantee at least 100 days of work annually to rural households. Its goal is to reduce poverty and boost rural development. However, rural distress has increased due to climate change, irregular monsoons, and farming uncertainties. Therefore, demand for work under the scheme has grown steadily.

The proposed 12% budget hike adds about Rs 62,760 crore. This will help meet the growing demand for work and ensure timely wage payments. Wage delays have been a persistent issue. Thus, the extra funds can reduce delays and improve worker confidence.

Key Benefits of the Budget Increase

  • More Employment: The scheme will offer more work opportunities, especially in states with high rural unemployment.
  • Infrastructure Growth: Increased funding will support durable rural assets such as water conservation, afforestation, and irrigation projects.
  • Sustainable Livelihoods: The budget boost will promote climate-resilient farming and improve soil and water management.
  • Economic Stability: Higher rural incomes will reduce migration to cities. Moreover, this will stimulate local economies by increasing buying power.

Challenges in Fund Utilization

Despite the budget hike, effective implementation remains a challenge. Delays in wage payments and lack of transparency have limited the scheme’s impact. To fix these issues, the ministry plans to:

  • Improve digital payment systems to speed up wage disbursal.
  • Increase social audits and community monitoring.
  • Use data analytics to track project progress and spending.
  • Collaborate closely with state governments to ensure timely fund releases.

Looking Ahead

The proposal for the MGNREGS budget hike 2025 will undergo parliamentary review. Given the scheme’s importance, this hike could be a key step toward sustainable rural development in India. It will help millions of rural households secure better livelihoods and create long-term assets.