Executive Summary:
This document is the answer to Lok Sabha Unstarred Question No. 306 regarding the allocation of funds under the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS). It addresses concerns about reduced funding, wage delays, underfunding, and the effectiveness of Aadhaar-based payments. The answer was provided on July 22, 2025, by the Minister of State in the Ministry of Rural Development.
Key Points / Main Content:
* **Budget Allocation:**
* The budget allocation for MGNREGS has steadily increased over the years.
* The allocation increased from Rs 11,300 crore in FY 2006-07 to Rs 33,000 crore in FY 2013-14.
* For FY 2024-25 and FY 2025-26, the budget allocation stands at Rs 86,000 crore, the highest ever at the Budget Estimate (BE) stage.
* Details of budget allocation from FY 2014-15 to FY 2025-26 are provided in a table.
* **Demand for Work and Fund Release:**
* MGNREGA aims to provide at least 100 days of guaranteed wage employment to rural households.
* The Ministry emphasizes that no demand for employment should be unmet.
* Fund release to States/UTs is a continuous process, and the Central Government is committed to providing funds as per the demand for employment.
* The Ministry seeks additional funds from the Ministry of Finance as needed.
* **Aadhaar-Based Payment System (ABPS):**
* All wage payments are credited directly to workers' bank accounts using their Aadhaar number.
* ABPS aims to improve targeting, efficiency, and reduce payment delays.
* ABPS helps curb leakages, promotes greater accountability and transparency, and minimizes transaction rejections due to frequent changes in bank accounts.
* The scale of rejected transactions drastically decreased from 8.50 (NACH) to 0.41 (ABPS) between January 1, 2024, and February 25, 2025.
Impact Analysis:
* **Rural Households/MGNREGA Workers:**
* *Impact:* Benefit from continued wage employment opportunities and more efficient, transparent, and timely wage payments through ABPS.
* *Action Required:* Ensure their Aadhaar numbers are linked to their bank accounts.
* **State/UT Governments:**
* *Impact:* Responsible for ensuring that employment demand is met and for implementing MGNREGA effectively.
* *Action Required:* Continuously monitor employment demand, request funds as needed, and implement ABPS for wage payments.
* **Ministry of Rural Development:**
* *Impact:* Responsible for overseeing the implementation of MGNREGA and ensuring adequate fund allocation.
* *Action Required:* Continue to monitor the demand for employment, allocate funds accordingly, and seek additional funds from the Ministry of Finance when necessary.
* **Ministry of Finance:**
* *Impact:* Responsible for providing additional funds to the Ministry of Rural Development for MGNREGA implementation.
* *Action Required:* Consider requests for additional funds from the Ministry of Rural Development to meet employment demand under MGNREGA.
Key Entities Referenced
Ministry of Rural Development: A ministry in the Government of India responsible for rural development.
Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS): An Indian labour law and social security measure that aims to guarantee the 'right to work'. It aims to enhance livelihood security in rural areas by providing at least 100 days of wage employment in a financial year to every household whose adult members volunteer to do unskilled manual work.
Mahatma Gandhi National Rural Employment Guarantee Act 2005: The legal framework that established the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS).
Ministry of Finance: A ministry in the Government of India responsible for the finances of the country.
Aadhaar: A 12-digit unique identity number issued to all Indian residents based on their biometric and demographic data.
Direct Benefit Transfer (DBT): A mechanism to transfer subsidies directly into the bank accounts of beneficiaries.
Aadhaar Based Payment System (ABPS): A system that uses Aadhaar numbers to make payments directly into the bank accounts of beneficiaries.
SHRI Y S AVINASH REDDY: A member of Lok Sabha who raised a question about the allocation of funds under MGNREGS.
GOVERNMENT OF INDIA
MINISTRY OF RURAL DEVELOPMENT
DEPARTMENT OF RURAL DEVELOPMENT
LOK SABHA
UNSTARRED QUESTION NO. 306
ANSWERED ON 22/07/2025
ALLOCATION OF FUND UNDER MGNREGS
306. SHRI Y S AVINASH REDDY:
Will the Minister of RURAL DEVELOPMENT be pleased to state:
(a) whether the Government has reduced allocation for Mahatma
Gandhi National Rural Employment Guarantee Scheme
(MGNREGS) and if so, the details thereof and if not, the
reasons therefor since 2014 to till date;
(b) whether this was despite implementation in recent years,
experiencing wage delays and underfunding and this has also
depressed demand with formal requests for work only being a
portion of the actual demand and if so, the details thereof;
(c) whether it is a fact that Aadhaar-based payments have neither
reduced corruption nor stopped wage payment delays while
creating hurdles for officials and workers during
implementation; and
(d) if so, the details thereof and the corrective steps taken by the
Government till now?
ANSWER
MINISTER OF STATE IN THE MINISTRY OF RURAL DEVELOPMENT
(SHRI KAMLESH PASWAN)
(a): The Budget allocation under Mahatma Gandhi NREGA has
steadily risen over the years. The budget allocation for the financial
year 2006-07 was Rs 11,300 crore which increased to Rs 33,000
crore in FY 2013-14. During the FY 2024-25 budget allocated for the
scheme was Rs. 86,000 crore which was the highest ever allocation
to the scheme at the BE stage. For the FY 2025-26, budget
allocation at BE stage continues to stand at Rs 86,000 crore which
underscores the Government’s continued support to the scheme.
The details of the budget allocated for the scheme since FY 2014-15
is given below:
Page 1 of 3SI. Financial Budget Revised
No. Year Estimate Estimate
(Rs. in crore) (Rs. in crore)
1 2014-15 34000.00 33000.00
2 2015-16 34699.00 37345.95
3 2016-17 38500.00 48220.26
4 2017-18 48000.00 55167.06
5 2018-19 55000.00 61830.09
6 2019-20 60000.00 71001.81
7 2020-21 61500.00 111500.00
8 2021-22 73000.00 98000.00
9 2022-23 73000.00 89400.00
10 2023-24 60000.00 86000.00
11 2024-25 86000.00 86000.00
12 2025-26 86000.00 -
(b): The Mahatma Gandhi National Rural Employment Guarantee
Act 2005 (Mahatma Gandhi NREGA) aims at enhancing livelihood
security of households in rural areas of the country by providing at
least one hundred days of guaranteed wage employment in a
financial year to every household whose adult members volunteer to
do unskilled manual work. The scheme serves as a fallback option
when no better employment opportunity is available. The Ministry
regularly emphasizes during interactions with the States/UTs to
ensure that no demand for employment is left unmet. Under the
scheme fund release to the States/UTs is a continuous process and
the Central Government is committed to making funds available to
States for the implementation of the Scheme as per the demand for
the employment on the ground. The Ministry seeks additional funds
for implementation of Mahatma Gandhi NREGS from the Ministry of
Finance as and when required for meeting the demand for
employment on the ground.
(c)& (d): Under Mahatma Gandhi NREGA Direct Benefit Transfer,
all wage payments to the workers are to be credited into the bank
accounts of the workers. The crediting of payments are done using
Page 2 of 3the Aadhar number of the beneficiary with which the account is
linked.
Aadhaar Based Payment System (ABPS) conversion is a major
reform process where benefits are credited directly into the bank
accounts based on the Aadhaar number of the workers, cutting
several layers in the delivery process. APBS helps in better
targeting, increasing the efficiency of the system and reducing the
delays in payments, ensuring greater inclusion by curbing leakages
and thereby, promoting greater accountability and transparency.
One of the several benefits of APBS conversion is to minimize
the rejection of transactions due to the frequent changing of bank
accounts maximizing the performance of DBT. During a period from
1st january,2024 to 25th Feburary,2025 the scale of rejected
transactions for reasons such as no such account or account closed
etc. has drastically come down from 8.50% (in case of earlier NACH
payment mode) to a mere 0.41% in case of ABPS system. This
clearly establishes the benefits of the ABPS systems for the welfare
of the beneficiaries.
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