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20 Dec 2025·Source: The Hindu
3 min
Polity & GovernanceEconomySocial IssuesNEWS

Punjab to Hold Special Session on MGNREGA Revamp Amidst Funding Concerns

Punjab CM announces special session to discuss MGNREGA revamp, citing Centre's reduced funding share.

Punjab to Hold Special Session on MGNREGA Revamp Amidst Funding Concerns

Photo by Markus Spiske

Punjab Chief Minister Bhagwant Mann announced a special Assembly session in January to discuss the revamp of a rural jobs scheme, likely referring to the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA). This move comes amidst protests by the Opposition against the proposed "Viksit Bharat Guarantee for Rozgar and Ajeevika Mission (Gramin)" Bill, which seeks to replace MGNREGA.

Mann highlighted a critical concern: the Centre's funding share for the scheme is reportedly changing from 90% to 60%, shifting a greater financial burden onto states. This development is highly relevant for UPSC aspirants, touching upon federalism, social welfare schemes, rural development, and the financial implications of central schemes for states (GS-II and GS-III).

Key Facts

1.

Punjab CM Bhagwant Mann announced special Assembly session in January

2.

Session to discuss revamp of rural jobs scheme (likely MGNREGA)

3.

Opposition protesting 'Viksit Bharat Guarantee for Rozgar and Ajeevika Mission (Gramin)' Bill

4.

Proposed Bill seeks to replace MGNREGA

5.

Centre's funding share for scheme reportedly changing from 90% to 60%

UPSC Exam Angles

1.

Fiscal Federalism and Centre-State Financial Relations (GS-II, GS-III)

2.

Social Welfare Schemes and Rural Development (GS-II, GS-III)

3.

Constitutional Provisions related to State Legislature and Special Sessions (GS-II)

4.

Legislative Process and Replacement of Acts (GS-II)

5.

Impact of Policy Changes on State Finances and Public Expenditure (GS-III)

Visual Insights

Punjab's Stance on MGNREGA Funding Shift

This map highlights Punjab, the state at the forefront of the debate regarding the proposed changes to MGNREGA funding. The special assembly session underscores the state's concern over increased financial burden.

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📍Punjab

MGNREGA Funding: Current vs. Proposed Changes

This table outlines the significant shift in the funding pattern for rural employment schemes, from the existing MGNREGA to the proposed 'Viksit Bharat Guarantee for Rozgar and Ajeevika Mission (Gramin)' Bill, highlighting the increased financial burden on states.

AspectCurrent MGNREGA (Pre-2025)Proposed Scheme (Post-2025, as per news)
Unskilled Labour Cost100% borne by CentrePart of overall 60% Centre share (implies increased state burden)
Material Cost75% by Centre, 25% by StatePart of overall 60% Centre share (implies increased state burden)
Skilled Labour & Administrative CostPrimarily borne by StatePart of overall 40% State share (implies increased state burden)
Overall Central ContributionHigher (historically ~80-90% of total expenditure)Significantly reduced (reportedly ~60% of total expenditure)
Impact on StatesLesser direct financial burden for core componentsIncreased financial burden, potentially straining state budgets
More Information

Background

The Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA), enacted in 2005, is a flagship social welfare scheme in India aimed at guaranteeing the 'right to work' by providing at least 100 days of wage employment in a financial year to every rural household whose adult members volunteer to do unskilled manual work. It is a demand-driven scheme, and its funding pattern has historically been a mix of central and state contributions, with the Centre bearing a major share of wage costs and material costs.

Latest Developments

Punjab Chief Minister Bhagwant Mann's announcement of a special Assembly session to discuss the revamp of MGNREGA, amidst protests against a proposed 'Viksit Bharat Guarantee for Rozgar and Ajeevika Mission (Gramin)' Bill, highlights significant shifts. The core concern is the reported change in the Centre's funding share from 90% to 60%, which would substantially increase the financial burden on states. This move is seen as a challenge to fiscal federalism and the sustainability of social welfare programs.

Practice Questions (MCQs)

1. With reference to the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA), consider the following statements: 1. It guarantees 100 days of wage employment in a financial year to every rural household whose adult members volunteer for unskilled manual work. 2. The Act mandates that at least one-third of the beneficiaries should be women. 3. The unemployment allowance, if employment is not provided within 15 days of application, is fully borne by the Central Government. Which of the statements given above is/are correct?

  • A.1 and 2 only
  • B.2 and 3 only
  • C.1 and 3 only
  • D.1, 2 and 3
Show Answer

Answer: A

Statement 1 is correct. MGNREGA aims to enhance livelihood security in rural areas by providing at least 100 days of guaranteed wage employment in a financial year to every household whose adult members volunteer to do unskilled manual work. Statement 2 is correct. The Act mandates that at least one-third of the beneficiaries should be women, promoting gender equity in employment. Statement 3 is incorrect. The unemployment allowance, if employment is not provided within 15 days of application, is to be paid by the State Government, not the Central Government. This places a financial responsibility on the state to ensure timely employment.

2. In the context of fiscal federalism in India, a proposed change in the funding pattern of a Centrally Sponsored Scheme (CSS) from 90:10 to 60:40 (Centre:State) ratio would primarily lead to which of the following? 1. Increased fiscal space for the Central Government to fund new initiatives. 2. Enhanced autonomy for State Governments in scheme implementation due to higher financial stake. 3. Greater financial burden on State Governments, potentially affecting their fiscal health. 4. A shift towards more 'tied grants' from the Centre to ensure state compliance. Select the correct answer using the code given below:

  • A.1 and 2 only
  • B.2 and 3 only
  • C.1 and 3 only
  • D.1, 2, 3 and 4
Show Answer

Answer: C

Statement 1 is correct. If the Centre's share decreases, it theoretically frees up central funds that can be reallocated to other initiatives or used to reduce the central deficit. Statement 2 is incorrect. While states might have a higher financial stake, the nature of Centrally Sponsored Schemes often involves central guidelines and monitoring, limiting true autonomy. A higher financial burden might even reduce their capacity for autonomous action. Statement 3 is correct. A reduction in the Centre's share from 90% to 60% directly means states have to bear a larger proportion (from 10% to 40%), significantly increasing their financial burden and potentially straining their budgets. Statement 4 is incorrect. 'Tied grants' are usually linked to specific conditions or outcomes. A shift in funding ratio itself doesn't inherently imply a move towards more tied grants; rather, it's about the distribution of financial responsibility. If anything, states might demand more untied funds to manage the increased burden.

3. Consider the following statements regarding the legislative procedure for replacing an existing Central Act in India: 1. A new Bill to replace an existing Central Act can be introduced in either House of Parliament. 2. If the proposed Bill pertains to a subject on the Concurrent List, both the Parliament and State Legislatures have the power to legislate, but Parliamentary law generally prevails in case of conflict. 3. A special Assembly session called by a State Chief Minister can directly repeal or amend a Central Act if it affects the state's interests. Which of the statements given above is/are correct?

  • A.1 only
  • B.1 and 2 only
  • C.2 and 3 only
  • D.1, 2 and 3
Show Answer

Answer: B

Statement 1 is correct. A Bill can be introduced in either Lok Sabha or Rajya Sabha (except Money Bills, which originate in Lok Sabha) to replace an existing Central Act. Statement 2 is correct. For subjects on the Concurrent List (like social security, economic and social planning, which MGNREGA falls under), both the Parliament and State Legislatures can make laws. However, Article 254 states that if a State law is repugnant to a Parliamentary law on a Concurrent List subject, the Parliamentary law shall prevail, unless the State law has received Presidential assent after being reserved for his consideration. Statement 3 is incorrect. A State Assembly, even in a special session, cannot directly repeal or amend a Central Act. It can pass resolutions, express concerns, or even pass its own law on a Concurrent List subject (which would then be subject to Article 254), but it cannot unilaterally nullify a Central Act. The power to repeal or amend a Central Act lies with the Parliament.

4. Which of the following statements correctly describes the 'Viksit Bharat Guarantee for Rozgar and Ajeevika Mission (Gramin)' Bill, as mentioned in the context of replacing MGNREGA?

  • A.It is a Central Act already passed by Parliament, aiming to expand urban employment guarantees.
  • B.It is a proposed Bill by the Central Government, intended to replace MGNREGA, with potential changes in funding patterns.
  • C.It is a State-specific initiative launched by Punjab to supplement MGNREGA benefits.
  • D.It is a private member's bill introduced in the Rajya Sabha to strengthen existing rural employment schemes.
Show Answer

Answer: B

The news article states that the Opposition is protesting against the proposed 'Viksit Bharat Guarantee for Rozgar and Ajeevika Mission (Gramin)' Bill, which 'seeks to replace MGNREGA'. It also mentions that the Centre's funding share for the scheme is 'reportedly changing', implying this change is linked to the proposed replacement. Therefore, it is a proposed Bill by the Central Government intended to replace MGNREGA, likely with changes in funding patterns.

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