Global Economists Warn India Against Dismantling MGNREGA, Call It a ‘Historic Error’
A group of leading international economists and social scientists wrote an open letter to the Government of India expressing profound concern over the imminent repeal of the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA).
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A group of internationally renowned economists and public policy scholars have issued an open letter urging the Indian government not to repeal the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA), warning that replacing it with the proposed Viksit Bharat – Guarantee for Rozgar and Ajeevika Mission (Gramin) Bill (VB–G RAM G Bill 2025) could undermine one of the world’s most significant employment rights programmes.
In the letter addressed to the Indian Government, signatories including Nobel laureate Joseph E. Stiglitz, renowned French economist Thomas Piketty, and United Nations Special Rapporteur Olivier De Schutter said the government’s restructuring threatens the foundational design of MGNREGA as a demand-driven employment guarantee.
Drafted by the Levy Economics Institute and signed by leading global experts, the letter calls for the protection and strengthening of MGNREGA — enacted in 2005 as the world’s largest rights-based public employment scheme, guaranteeing 100 days of wage labour to rural households on demand.
The signatories argue that the government’s reform proposal risks dismantling key design principles of the scheme by centralising authority while shifting heavy administrative and financial burdens onto state governments. The new funding pattern creates a catastrophic Catch-22: states bear legal liability for providing employment, while central financing is withdrawn.
MGNREGA, they note, has delivered more than two billion person-days of employment annually to around 50 million rural households, with notable gains in grassroots equity: over half of its workers are women, and nearly 40% belong to Scheduled Castes and Tribes. The early years of the Act coincided with unprecedented rural wage growth, and studies confirmed the programme’s positive effects on economic output and efficiency, dispelling myths of unproductivity.
However, the letter states that chronic underfunding and payment delays have long hampered implementation. The current attempt to devolve the scheme to states, without commensurate fiscal support, now threatens its existence. This structural sabotage is compounded by discretionary “switch-off” powers, which allow the scheme to be suspended arbitrarily and render the guarantee meaningless. The new framework institutionalises this threat by imposing unfunded mandates on states without consultation.
Beyond employment, the letter highlights that MGNREGA’s demand-driven design not only provides wages but also builds vital rural assets such as wells, roads and ponds, stimulating local economies. By making projects financially untenable for states, these multiplier effects are extinguished.
Calling the proposed dismantling a “historic error”, the signatories warn of severe consequences for rural livelihoods, poverty reduction and employment rights. They demand the restoration of central funding, timely wage payment systems and a reaffirmation of the Act’s foundational guarantee of the right to work.
