Introduction

The Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA), introduced in 2005, stands as a pivotal social welfare initiative in India. It provides a legal entitlement of up to 100 days of wage employment annually to every rural household willing to undertake unskilled manual work, with the dual objective of enhancing livelihood security and contributing to the creation of sustainable rural assets(Government of India, 2025). Rajasthan has taken the lead in implementing this initiative, providing wage jobs to rural households and improving rural infrastructure at the same time (Sharma, 2023). One of the top states in putting this program into practice is Rajasthan, which simultaneously improves rural infrastructure and offers pay jobs to rural households. Rajasthan’s desert terrain and ongoing socioeconomic issues have made it a key location for the MGNREGA’s implementation(Kanwar, 2024). Rajasthan has historically done rather well in rural employment under the MGNREGS system, but the present trend indicates a worrying downturn. The number of person days generated in 2025–2026 fell to a four-year low raises an essential question: is there a crisis in rural livelihoods, or is this a deliberate policy change intended to bring about reform?

1. The Steep Decline in MGNREGS Employment

By June of the fiscal year 2025–2026, Rajasthan had only produced 9.71cr. person-days, a considerable drop from 13.99cr. during the same period the year before (Ministry of Rural Development, 2025). In four years, this was the lowest quantity. One of the primary reasons is a large reduction in the state’s labour budget, which went from 27cr. in 2024–2025 to 12.5 crore in 2025–2026. Rajasthan has long been in the forefront of the nation’s MGNREGS implementation, with strict standards that restrict spending to 60% of the authorized labour budget(Dutta, 2025). It created 46cr. person-days in 2019–20 and remained at the top until 2023–24, when it fell to second place with 36.5cr. behind Tamil Nadu’s 40.8cr (TNN, 2024).

2. Fundamental Structural Issues

The ongoing discrepancy between the growing demand for labour and its actual implementation—where households register but do not obtain sufficient employment is a major obstacle for MGNREGA. Effective delivery is further hindered by institutional and technical limitations, such as wage disbursement delays, restricted categories of acceptable labour, and Aadhaar-linked payment exclusions (Singh et al., 2024).

2.1 Demand and Implementation Mismatch

Rajasthan has seen a dramatic fall in the actual provision of work, despite a steady growth in household registrations under the MGNREGA. A recent analysis by LibTech India found that, despite an 8.6% increase in registrations, the state saw a 15.9% decrease in workdays during 2024–2025. Regretfully, only roughly 7% of households were able to fulfill the legally required 100 days of work, indicating a notable discrepancy between statutory entitlements and actual delivery(Nair, 2025)

2.2 Institutional and Technical Constraints

Numerous administrative and structural issues further limit the program’s ability to operate. About 5–6 lakh job cards were eliminated from the system in recent years after being found to include erroneous data, reportedly saving close to ₹2,600cr. Nevertheless, the federal government has yet to settle material cost arrears totalling more than ₹4,000cr, which puts further pressure on local implementation. Furthermore, the effectiveness of the system has been undermined by limitations on the types of employment that are allowed under NREGS as well as late payments to field-level supervisors (mates). The exclusion of legitimate beneficiaries has also been facilitated by technological obstacles like the Aadhaar-Based Payment System (ABPS). Concerns have been expressed about the potential erosion of MGNREGA’s basic mandate as a legally secured right to employment due to the widespread deletion or delisting of job cards.

3. Social and Economic Implications

Significant livelihood insecurity has resulted from Rajasthan’s MGNREGS employment generating drop, especially for marginal farmers and landless workers who depend on the program to augment their meager farm-based incomes. Many rural households are being pushed into distress-driven migration as a result of declining employment possibilities, diminished purchasing power, a greater reliance on informal lending, and increased susceptibility to debt. 

In drought-prone areas like Barmer and Jaisalmer, where MGNREGS has traditionally served as a buffer against frequent crop failures, unpredictable rainfall, and other climatic shocks, this deterioration of the safety net is particularly serious. The program’s contraction threatens the long-term viability of rural livelihoods in one of India’s most climate-sensitive regions by endangering not only the security of individuals and households but also the resilience of entire communities to economic and environmental uncertainties.

4.  Livelihood Crisis or a Push for Policy Discipline?

A severe sign of a livelihood crisis in rural Rajasthan is the reduction in the labour budget, which is accompanied by a comparable drop in person-days. Since MGNREGS serves as a crucial source of additional income for many households, the reduction in the number of jobs available has left them at risk of both lost chances and possible delays in wage disbursement. Such underfunding, according to civil society organisations, may diminish the program’s function as a safety net and reduce effective demand for labour, which would undermine rural communities’ overall resilience(Baik, 2024).

It is possible to read the recent economic tightening, which included budget cuts and the implementation of a 60% spending cap, as an effort to improve efficiency, stop leaks, and deal with resource abuse. Another indication of a move towards institutional openness and financial accountability is the methodical elimination of work cards that are duplicates or ineligible. However, such policies run the risk of causing excessive retrenchment unless they are accompanied by endeavors to introduce complementary rural employment programs or parallel efforts to increase administrative capacity. By doing this, they can unintentionally undermine the safeguarding role that MGNREGS was intended to offer to homes that are at risk(Choragudi, 2025).

5. Policy Reform Recommendations

5.1 Reviving Resource Allocation and Budgetary Support 
Budgetary resources must be restored to levels sufficient for satisfying rural demands, at least equal to the 27cr person-days allotted in FY 2024–2025, in order to overcome the growing disparity between demand and work supply. To enable full use of approved funds when demand occurs, the restrictive 60% labour cap should be loosened or eliminated. Clearing outstanding material obligations, estimated at ₹4,000cr, is equally crucial because it would increase local confidence in the program’s legitimacy and guarantee more efficient project execution.

5.2 Improving Institutional Capacity and Access 

Restoring job cards that were mistakenly erased because of Aadhaar-based Payment Systems (ABPS) or other technological issues is necessary to streamline access to employment under MGNREGS. Temporary exemptions should be granted in cases where Aadhaar links serve as obstacles in order to protect the rights of legitimate workers. Additionally, for efficient monitoring and prompt wage disbursement, more funding must be allocated to administrative capacity through improved facilities, training, and staffing at the panchayat and block levels. The scheme’s local relevance would be further strengthened by adding context-specific livelihood activities to the list of acceptable works.

5.3 Expanding Employment Prospects Outside of MGNREGS

Additional programs could be tested in semi-urban settings, taking inspiration from models like Rajasthan’s Indira Gandhi Urban job Guarantee Scheme (2022), which offers 100 days of work in towns, in light of the structural limitations of rural job guarantees. We can also learn from Karnataka’s efforts to create jobs through self-help groups, rural businesses, and natural resource management, which expand income prospects and support long-term development objectives. Livelihood activities would increase the scheme’s applicability locally.

5.4 Strengthening Rights-Based Protections, Accountability, and Transparency 

Restoring public confidence in MGNREGS requires strong accountability procedures. As long as digital solutions are made to be inclusive rather than exclusive, real-time dashboards, geotagged assets, prompt Fund Transfer Orders (FTOs), and mobile attendance systems can all improve transparency. To find gaps, resolve complaints, and improve participatory government, regular social audits ought to be established. Additionally, the protective function of MGNREGS may be strengthened by legislative measures like the proposed Minimum Income Guarantee Bill, which calls for an increase in the number of guaranteed days. The program would be included into a more thorough rights-based framework for informal workers if its results were in line with larger initiatives to reduce poverty and provide social safety.

Conclusion

The development of MGNREGS in Rajasthan illustrates the potential and risks of the biggest rights-based employment initiative in India. Although the Act was intended to serve as a lifeline for rural households dealing with long-term livelihood insecurity, the recent decline in employment creation brought on by administrative snags, budget cuts, and technical exclusions raises grave concerns about the Act’s deteriorating protective role. MGNREGS has historically acted as a buffer against agrarian and climatic shocks, but the sharp decline in person-days poses a potential to worsen rural misery, especially in districts that are prone to drought.

At the same time, policy changes that emphasise efficiency, accountability, and budgetary restraint indicate that the scheme’s mission has changed. Therefore, the difficulty is in finding a careful balance between protecting the rights of households that are at risk and maintaining institutional efficiency and transparency. Restoring MGNREGS as a pillar of rural social protection and resilience requires bolstering financial assistance, removing obstacles to access, expanding livelihood options, and integrating strong accountability structures.

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