India: NREGA Sangharsh Morcha’s Statement on Budget FY 26-27

NREGA Sangharsh Morcha
Twitter: @NREGA_Sangharsh
Facebook: @NREGASangharshMorcha
Email: nrega.sangharsh.morcha[at]gmail.com

Opacity and Disregard for Workers, GRAMG Sham Exposed

NREGA Sangharsh Morcha’s Statement on Budget FY 26-27

The Budget Speech and Documents aggravate the Modi Government’s lack of transparency on VB-GRAMG. In her 90-minute speech, the Finance Minister did not utter a single word on MGNREGA or VB-GRAMG. The Budget Documents also gave no indication whatsoever of where and when VB-GRAMG is to be notified, what the state-wise “normative allocations” are likely to be, or how the transition from MGNREGA is to take place. This uncertainty and confusion are putting state governments in a difficult position, as they have to make plans in the dark, including significant budget allocations. Frontline functionaries are even more confused, not to speak of rural workers. The Central Government must end this opacity and reveal its plans for VB-GRAMG without delay.

The Union budget FY 26-27 makes it clear what civil society and workers unions have been warning all along: the 125-day promise of the VB-GRAMG Bill is nothing but an eyewash. The budget allocation is a mere 42% of what will be required to actually finance this guarantee. Additionally, this budget brings no clarity at a time when states need to allocate funds for the new scheme, no clarity on what the summer months, traditionally NREGA’s heaviest seasons, hold for workers. Below is a conservative calculation of the budget that will be required to actually achieve the 125 day promise, and what the current allocation can achieve. We take only the average cost per day of work, and only the number of households that worked, in the current FY. In reality, costs in FY 26-27 will increase, and budgeting must be done for every registered household under NREGA.

Therefore, minimally to generate 125 days of work for only active households, the total budget of VB-GRAMG needs to be at least Rs. 3.84 lakh crore. Of this, the Centre’s share at 60% will stand at Rs. 2.3 lakh crore. The actual allocation of Rs. 95,692 crore is only 42% of this required allocation. To actually provide 125 days of work to every household that is registered under MGNREGA, the budget will need to be nearly Rs. 7 lakh crore—a laughably distant possibility.

But how much work can be generated with the provided VB-GRAMG budget? How much of this 125 day promise can be fulfilled?

Assuming the allocation of Rs. 95,692 crore is the Centre’s share (60%), the states’ share will stand at Rs. 63,795 crore. This is an aggregate national figure; state-wise allocations will differ in reality, but the Centre has given no clarity on that.

Thus, the total budget for VB-GRAMG will stand Rs. 1.59 lakh crore. With this allocation, for only the active households, the average days of work generated will stand at 52. As per the VB-GRAMG’s guidelines, states are responsible for funding 100% of the expenditure beyond the Centre’s nominal allocation. Therefore to actually reach the 125 day guarantee, states will have to shell out over Rs. 2 lakh crore.

On MGNREGA

The Union government has allocated Rs. 30,000 crore for MGNREGA for FY 26-27. As current MGNREGA finances stand, FY 25-26 is on track to end with outstanding liabilities of at least Rs. 11,000 crore, a conservative estimate using FY 24-25 trends for February and March. Adding to this other pending liabilities owed under MGNREGA, for instance the dues to West Bengal, outstanding liabilities add up to approximately Rs. 15,000 crore.

Therefore, of the Rs. 30,000 crore allocation for MGNREGA for FY 26-27, half is likely to be used for simply clearing outstanding dues. The Centre has given no clarity on what this allocation is intended towards. If it is meant to be used for MGNREGA work in the first quarter, as the VB—GRAMG programme gets set up, it is woefully inadequate. As per historical trends, April to June are the heaviest months for NREGA work, before the agricultural season begins. At least 40% of the FY’s budget is spent in this quarter. Therefore, adjusting for outstanding liabilities, the allocations of Rs. 30,000 crore is significantly inadequate to provide employment during the crucial summer months. The government’s disregard for workers is evident.

The budget exposes the VB-GRAMG for what it is: a sham. NSM reiterates its demand for a full repeal of the VB-GRAMG, and a reinstatement of NREGA.