We, the undersigned scholars, policymakers, lawyers, and civic actors (all friends of India), write to express profound concern regarding the imminent repeal of the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA). We urge a recommitment to this landmark legislation, which stands as the world’s most significant policy operationalizing a demand-driven, legal right to employment.
Originally passed with unanimous parliamentary support, MGNREGA transcends political lines. Its foundational principle — that the national government must guarantee an employment safety net — affirms economic dignity as a fundamental right. Empirical evidence underscores its impact.
MGNREGA routinely generates over 2 billion person-days of work annually for some 50 million households, with transformative equity: more than half of all workers are women, and about 40% are from Scheduled Castes or Tribes. The early years of the Act coincided with unprecedented rural wage growth, and studies confirmed the program’s positive effects on economic output and efficiency, dispelling myths of unproductivity.
However, chronic underfunding and payment delays have long hampered implementation. The current shift to devolve the scheme to states and without commensurate fiscal support, now threatens its existence. States lack the central government’s financial capacity. The new funding pattern creates a catastrophic Catch-22: states bear legal liability for providing employment, while central financing is withdrawn. Previously contributing only 25% of material costs, states now face burdens of 40% to 100% of total costs, ensuring poorer states will curb project approvals, directly stifling work demand.
This structural sabotage is compounded by discretionary “switch-off” powers, which allow the scheme to be suspended arbitrarily and render the guarantee meaningless. The unexplained defunding of West Bengal in the last three years exemplifies this political misuse. The new framework institutionalizes this risk, imposing unfunded mandates on states without consultation.
MGNREGA’s demand-driven design not only provides wages but also builds vital rural assets such as wells, roads, ponds, stimulating local economies. By making projects financially untenable for states, these multiplier effects are extinguished.
MGNREGA has captured the world’s attention with its demonstrated achievements and innovative design. To dismantle it now would be a historic error. It would abandon a proven instrument for poverty alleviation, social justice, and care for the environment. We call for its restoration through assured central funding, timely wages, and an unequivocal return to its foundational guarantee of the right to work.
The Levy Economics Institute drafted this letter of support, signed by the following experts:
Olivier De Schutter, UN Special Rapporteur on extreme poverty and human rights
Isabelle Ferreras, Professor, University of Louvain, Belgium
James Galbraith, Professor, The University of Texas at Austin, USA
Darrick Hamilton, Professor, New School for Social Research, USA
Thomas Piketty, Professor, Paris School of Economics, France
Joseph E. Stiglitz, University Professor and Nobel Laureate, Columbia University, USA
Mariana Mazzucato, Director, Institute of Public Purpose and Policy, University of London
Pavlina R. Tcherneva, President, The Levy Economics Institute, USA
Imraan Valodia, Professor of Economics, University of Witwatersrand, South Africa
Randall Wray, Senior Scholar, The Levy Economics Institute, USA
and about two hundred more scholars.
