MGNREGA rejig to cost TN up to Rs 4,000 crore
According to official sources, if the new Bill, VB–G RAM G, is adopted in the present form, the Tamil Nadu government would be forced to incur financial burden to the tune of over Rs 3,000 to Rs 4,000 crore every year
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CHENNAI: The BJP-led central government decision to repeal the two-decade-old Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) with another legislation, titled the Viksit Bharat Guarantee for Rozgar and Ajeevika Mission (Gramin) Bill, 2025, is not merely a matter of renaming.
According to official sources, if the new Bill, VB–G RAM G, is adopted in the present form, the Tamil Nadu government would be forced to incur financial burden to the tune of over Rs 3,000 to Rs 4,000 crore every year.
The key to this is in Section 22 of the new legislation. Since the launch of the scheme, the funding pattern has remained unchanged, wherein the wage bill is funded by the Union government while the cost of materials and other administrative expenses are borne by State governments. However, according to the new Bill, states will have to chip in as much as 40 per cent of the total expense.
Speaking to DT Next, a senior official said the new exact additional expenditure would be known only after the number of person-days allotted to the State is approved by the Centre. Going by the expenditure incurred in the previous years, Tamil Nadu could incur anywhere between Rs 3,000 crore and Rs 4,000 crore, the official said.
In the current financial year, the Union government has approved 11.78 crore person-days so far, with Rs. 6,493 crore allocated up to December 3.
Beyond the financial burden, the Union government has also brought in sweeping changes, including empowering itself to decide how the work under the employment guarantee scheme should be implemented by deciding on annual allocation on the basis of ‘objective parameters’ it would fix.
That is not all. It can also decide where the work should be undertaken. Also, the scheme would be paused during peak agriculture seasons to ensure that adequate labourers are available for land-owning farmers.
These conditions would rile the opposition-ruled State governments, especially Tamil Nadu, which is already on a warpath with the Union government for what it alleges is the creeping centralisation of powers in complete disregard of federal principles.
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