India's Rural Jobs Scheme Is More Relevant Today Than It May Seem

It alleviates poverty but also has compound effects that can help revive demand in our hour of need

- HIMANSHU

August 2025 marks two decades of the landmark Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA). It was first started in 200 backward districts and expanded to the rest of rural India later. In terms of reach among rural households, it is the second-largest mass-benefit scheme after the National Food Security Act. Both these legislations enacted under the United Progressive Alliance (UPA) government created a rights-based framework for social protection. The last two decades have seen multiple changes in the way MGNREGA has been implemented, but it remains our most important social safety net in rural India.

It was not the first attempt by India's government to provide employment to millions of poor people. But it differed in three ways. First, since it was enacted by Parliament as a law, this public employment programme had legal backing and was thus immune to government whims and fancies. Second, its universal applicability in rural areas, based on the principle of self-selection, helped avoid errors of targeting that plagued our public programmes. Third, its indirect gains far outweigh its direct benefits of poverty reduction and employment generation.