The Mahatma Gandhi National Rural Employment Guarantee Act achieved significant gains in participation, digitisation and transparency over time, but “persistent structural weaknesses” limited its effectiveness, the Union government’s annual Economic Survey stated on Thursday.
The document said that the 2025 Viksit Bharat-Guarantee for Rozgar and Ajeevika Mission (Gramin) Act represented a decisive shift in India’s rural employment policy.
It added that the new Act was a “comprehensive legislative reset that aims to modernise rural employment guarantees, strengthen accountability, and align employment creation with long-term infrastructure and climate resilience goals”.
The Economic Survey, tabled by Union Finance Minister Nirmala Sitharaman in Parliament three days ahead of the Union Budget for the financial year 2026-’27, details the state of the country’s economy and suggests measures to boost growth.
The 2025 VB-G RAM G Bill was given assent by the president on December 21, two days after it was passed by Parliament amid protests by Opposition parties. The new rural employment law will replace the MGNREGA.
The MGNREGA was introduced in 2005 by the Congress-led United Progressive Alliance and aimed at enhancing the livelihood security of households in rural areas. The scheme guaranteed 100 days of unskilled work annually for every rural household that wants it, covering all districts in the country.
Under the new law, the number of guaranteed workdays will increase to 125, while states’ share of costs will rise to 40%. The Union government will continue to bear the wage component, with states sharing material and administrative expenses.
The legislation has drawn criticism from economists and labour rights experts.
On Thursday, the Economic Survey said that monitoring in several states showed gaps under MGNREGA, including work not being done on the ground, expenditure not matching physical progress, the use of machines in labour-intensive work and frequent bypassing of digital attendance systems.
It added that misappropriation accumulated over time and only a small proportion of households completed the full 100 days of employment after the Covid-19 pandemic, indicating that while delivery systems improved, the overall architecture of MGNREGA had reached its limits.
The new Act represented a “significant upgrade over MGNREGA, fixing structural weaknesses while enhancing employment, transparency, planning and accountability”, the Economic Survey said.
It added that the VB-G RAM G Act “builds on past improvements while addressing their shortcomings through a modern, accountable and infrastructure-focused framework”.
Economy Survey calls for re-examination of RTI Act
The Economic Survey also called for a re-examination of the 2005 Right to Information Act. It said that this was not to dilute the law’s spirit, but to align it with global best practices, incorporate evolving lessons and keep it firmly anchored to its original intent.
The document noted that the legislation was powerful democratic reform that served as a tool for accountability and against corruption.
However, it added that the Act carried risks of becoming an “end in itself”, where disclosures were celebrated regardless of contribution to better governance.
The Economic Survey suggested exploring “adjustments” to exempt disclosures related to the deliberative process of policymaking. It also proposed considering a ministerial veto with parliamentary oversight, to prevent disclosures that could “unduly constrain governance”, among others.
The document added that the Act was never intended “as a tool for idle curiosity”, nor as a mechanism to micromanage government from the outside.
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