Rural works spending may see a slight increase in FY26

Number of people seeking work every month under the scheme rose to a 4-month high in Dec

- Dhirendra Kumar & Rhik Kundu

The national rural job guarantee scheme that gives millions of the poorest Indians employment may see a higher budget allocation in FY26, two people aware of the matter said.

While allocations for the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS)—considered a lifeline for the rural poor—are unlikely to be increased during FY25 due to a rain-induced improvement in the rural economy, they may be slightly higher in FY26, as compared to FY25.

This is to factor in any challenges to the rural economy. However, the actual spending could be higher than the allocated amount in FY25.

"The allocations to MGNREGS could be higher in FY26 to provide a safety net against potential rural economic challenges," said the first person mentioned above, who spoke under the condition of anonymity.

"While FY25 benefitted from improved rural consumption, the government may prioritize increased funding for the scheme to ensure continued support for the most vulnerable sections of the population," the person added.