'War on the poor': Kerala to lose Rs 1,600 crore annually with new rural jobs law, says minister

Thiruvananthapuram Dec 16 The Union government’s proposed overhaul of the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) amounts to a "declaration of war against ordinary citizens" and will severely cripple Kerala’s finances, as it stands to lose nearly Rs 1,600 crore every year if the new law is implemented, Local Self-Government Minister M.B. Rajesh said on Tuesday.

Rajesh said the employment guarantee scheme was conceived during the first UPA government under sustained pressure from the Left and was designed as a demand-driven, rights-based programme.

"But systematic attempts to weaken it began during the second UPA regime and intensified after the BJP came to power. For the past decade, wages were delayed, arrears were allowed to pile up, and workdays were cut to discourage workers. The present Bill is the final step to dismantle the scheme altogether," he said.

The new Bill removes the very idea of a legal right to work, replacing it with employment based on Central targets and labour budgets, he said.

"The Centre is washing its hands of the responsibility to provide work," Rajesh alleged.

He noted out that while the Bill speaks of increasing workdays to 125, this would apply only to areas notified by the Centre, not all panchayats, rendering the promise largely meaningless.

A major concern, Rajesh said, was the change in the funding pattern to 60:40, shifting 40 per cent of the total cost to the states.

For Kerala, where MGNREGS expenditure averages Rs 4,000 crore annually, this would mean an additional burden of about Rs 1,600 crore.

"This is being imposed by a Centre already subjecting Kerala to financial strangulation," he said, adding that states would also have to bear the full cost of unemployment allowance and compensation for delayed wages.

Rajesh underlined Kerala’s exemplary performance under MGNREGS. In 2024–25, the state generated 9.07 crore person-days, spending over Rs 4,011 crore, and provided 100 days of work to over 5.19 lakh families, securing second place nationally.

In the current financial year, Kerala has already exceeded the approved labour budget of 5 crore person-days by generating 5.53 crore days.

"Earlier, the central law protected states that generated work based on demand. The new Bill punishes efficiency by forcing states to pay for excess work," he said.

The Minister also flagged progressive reductions in Central allocations, Aadhaar-based verification challenges in tribal and remote areas, restrictions on work during agricultural seasons, and provisions allowing the Centre to block funds on preliminary complaints.

He criticised the removal of Mahatma Gandhi’s name from the scheme, saying it symbolised the Centre’s intent to erase the programme’s original spirit.

"The employment guarantee scheme prevented starvation during the Covid-19 crisis and protected millions of rural families. The Centre must withdraw this Bill," Rajesh said, warning that its implementation would dismantle one of India’s most critical social security programmes.

Disclaimer: This post has been auto-published from an agency feed without any modifications to the text and has not been reviewed by an editor