Excelsior Correspondent
The Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA), implemented nearly two decades ago, has provided a statutory guarantee of livelihood security to rural households. However, over time, implementation experience has revealed a series of persistent and deep-rooted structural weaknesses that have affected the efficiency, transparency, and credibility of the programme.
In order to obtain a realistic assessment of ground-level conditions and strengthen implementation systems, special monitoring visits were undertaken across 55 districts in 25 States and Union Territories during FY 2025-26. More than one thousand worksites were inspected. These visits brought to light serious irregularities, including works that did not exist on the ground despite reported expenditure, execution of non-permissible works, financial irregularities, diversion of funds, and splitting of works into smaller components to obtain approvals from lower levels. In several instances, execution was found to be carried out through contractors or third parties, contrary to the clear prohibition on contractor involvement under the Act. Procurement processes were often weak, with single-vendor and single-tender situations increasingly prevalent, undermining transparency and competition. Work files frequently lacked documentation on royalty payments and GST compliance, pointing to weak financial controls and potential leakage.
These lapses were compounded by governance and oversight deficiencies. Cases of fake and inactive job cards, inflated muster rolls, incomplete and poor-quality works, and assets misaligned with local needs were repeatedly observed. The cumulative impact of these weaknesses has been misappropriation of public resources on the one hand, and dilution of the programme’s asset-creation objective on the other. Repeated advisories, capacity-building initiatives and corrective instructions issued by the Ministry have helped address some issues, but the persistence of irregularities demonstrates that the problem is systemic rather than episodic.
Social audits, which serve as an instrument for community-based oversight, have also highlighted widespread irregularities. A total of 11,04,627 cases involving financial misappropriation were reported, with recoverable amounts estimated at Rs 302.45 crore. However, only Rs 293.47 crore has actually been recovered. This detection and recoverable amounts clearly demonstrates weaknesses in enforcement, reluctance to fix responsibility, and inadequate follow-up. Similarly, although ombudspersons recommended recoveries amounting to Rs 17.14 crore, barely Rs 71.61 lakh has been realised. Monitoring visits during FY 2025-26 recommended further recoveries of nearly Rs 32 crore, yet Action Taken Reports show extremely low actual recoveries, highlighting the fragile state of accountability systems.
Internal audit findings further reinforce these concerns. As on 1 December 2025, there were 1,512 outstanding audit paragraphs arising from the Internal Audit Wing of the CCA Division. Of these, 145 paras specifically relate to financial misconduct, including misappropriation of funds, dubious and unsupported payments, irregular sanctioning and execution of works, diversion of funds to non-permissible purposes, and falsification of accounts through non-reconciliation and incorrect booking of expenditure. The total estimated financial implication of these paras is approximately Rs 278.32 crore, reflecting serious inadequacies in financial discipline and accountability mechanisms.
In certain states, irregularities have been particularly serious. Inspections in West Bengal revealed non-existent works, non-permissible activities, financial manipulation, and artificial splitting of works to bypass scrutiny. The absence of effective corrective action by the State Government resulted in temporary suspension of fund releases by the Central Government, underlining deficiencies in the monitoring architecture and lack of administrative accountability at the state level.
Beyond corruption-specific findings, broader structural weaknesses have also become evident. In several economically stronger states with comparatively lower rural poverty, utilisation of MGNREGA funds is disproportionately high, while poorer states with higher rural poverty ratios fail to utilise available allocations, creating inequities in access and outcomes. Over time, the programme has also shifted from its intended demand-driven character to a target-driven approach in many states, where works are selected to meet targets rather than reflect Gram Sabha priorities. This has weakened community participation and diluted the “right to demand work” principle.
Another emerging pattern relates to the high participation of elderly workers, including those above 60 and in some cases above 80 years, which adversely affects productivity and asset quality. Because wages are fully funded by the Central Government, states often prioritise labour-intensive works while under-investing in materials, resulting in technically weak and short-lived assets. With nearly 90 percent of expenditure borne by the Centre, limited financial participation of states has also weakened ownership, seriousness toward monitoring, and discipline in wage and material payments.
Taken together, these trends clearly indicate that despite the programme’s social relevance, weaknesses in transparency, monitoring, financial management, governance, and accountability have become systemic. Therefore, in order to address these structural challenges while strengthening livelihood security, improving governance, and enhancing asset quality, it became necessary to revamp the framework of rural employment. At the same time, it was essential to align rural development efforts with the broader vision of Viksit Bharat, ensuring that employment opportunities increase, livelihood security becomes stronger, and durable, planned, and convergent assets are created at saturation levels.
In this context, the Viksit Bharat – Guarantee for Rozgar and Ajeevika Mission (Gramin) (VB-G RAM G) Act, 2025 has been enacted, with the objective of addressing systemic deficiencies, restoring accountability, and ensuring that public expenditure genuinely contributes to sustainable livelihoods and quality rural infrastructure.
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