A group of leading international economists and social scientists has raised serious concerns over the proposed MGNREGA repeal, urging the Government of India to protect and strengthen the country’s flagship rural employment programme.
In an open letter addressed to the Indian government, globally renowned economists and public policy experts warned that replacing the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) with the proposed Grow India – Employment and Livelihoods Mission (Rural) Bill 2025 could significantly weaken one of the world’s largest rights-based employment schemes.
Global Experts Oppose MGNREGA Repeal
The letter has been signed by eminent figures including Nobel Prize-winning economist Joseph E. Stiglitz, French economist Thomas Piketty, and Olivier De Schutter, United Nations Special Rapporteur on Extreme Poverty. The signatories argue that the proposed restructuring threatens the core principle of MGNREGA as a demand-driven employment guarantee, replacing it with a centrally controlled and uncertain framework.
Prepared by the Levy Economics Institute and endorsed by leading global experts, the letter calls on the government to safeguard MGNREGA, which was launched in 2005 and guarantees 100 days of wage employment to rural households on demand.
Concerns Over Funding and Federal Burden
According to the economists, the proposed MGNREGA repeal risks dismantling the scheme’s foundational structure by shifting financial and administrative responsibility to state governments without assured central funding. This creates what they describe as a “catastrophic Catch-22”, where states remain legally bound to provide employment while losing access to guaranteed central funds.
The experts warn that such unfunded mandates could force states to limit or suspend work, effectively nullifying the Right to Work guaranteed under MGNREGA.
MGNREGA’s Impact on Rural India
The letter highlights that MGNREGA has generated over two billion person-days of employment annually, benefiting nearly 50 million rural households. More than 50% of workers are women, and around 40% belong to Scheduled Castes and Scheduled Tribes, making the scheme a cornerstone of inclusive growth.
Research cited by the signatories shows that MGNREGA contributed to historic rural wage growth, increased economic productivity, and strengthened local economies—countering long-standing claims that the programme is inefficient.
Payment Delays and Structural Risks
While acknowledging existing challenges such as chronic underfunding and wage payment delays, the economists argue that these issues require reform—not repeal. They caution that granting discretionary powers to suspend the scheme further undermines employment guarantees and institutionalizes uncertainty for rural workers.
Rural Assets and Economic Multiplier Effect
Beyond wages, MGNREGA plays a crucial role in creating durable rural assets such as roads, ponds, irrigation systems, and wells. These assets stimulate local economic activity and provide long-term benefits. The proposed MGNREGA repeal, experts warn, could eliminate these multiplier effects by making projects financially unviable for states.
‘Historic Mistake’ Warning to Government
Calling the proposed dismantling of MGNREGA a “historic mistake”, the signatories warn of severe consequences for rural livelihoods, poverty reduction, and employment rights across India. They demand renewed central funding, timely wage payments, and a firm commitment to preserving the fundamental guarantees of the Right to Work Act.
