The Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) has made a decent start in 2025-26, with an expenditure of Rs 9,078 crore until May 16. Work demand is led by Andhra Pradesh, Bihar, and Rajasthan.
The fund utilisation is about 58% of Rs 15,611 crore released by the Centre so far in FY26. In the Budget for FY26, the Centre has earmarked Rs 86,000 crore for the flagship scheme, the same as in FY25.
So far in FY26, 29.69 crore person days of work have been generated, and the number could touch around 286 crores achieved in FY25.
Of the total expenditure incurred till May 16, Rs 8,451 crore was on wages, Rs 388 crore on materials and RS 240 crore on administrative expenditure.
The average cost per person per day is Rs 316.1 so far in FY26, lower than 390.5 in FY25
The work demand was led by Andhra Pradesh with 6.57 million households seeking work under the programme till May 16, followed by Bihar with 4.39 million and Rajasthan 3.65 million households
Overall monthly work demand by households has remained steady with 20 million seeking work in April compared with 18.6 million in March and 21.78 million in February.
MGNREGS aims to provide at least 100 days of guaranteed wage employment in a financial year to every household in rural areas of the country, whose adult members volunteer to do unskilled manual work, mainly during off-seasons.
The highest the states had drawn was during Covid in FY21 at about Rs 1.1 lakh crore when rural distress was real. Since then, it has started to decline as economic activity picked up and steps were taken to plug leakages. The spending was Rs 96,812 crore in FY22, Rs 88,290 crore in FY23, Rs 88,217 crore in FY24 and Rs 85,771 crore in FY25.
The Centre has been saying that fund availability was not an issue in the demand-driven scheme, and additional funds could be provided as and when required to meet actual expenditure in the scheme.
Through the Public Financial Management System (PFMS), the Centre has been capturing data in real-time on the use of funds routed via state treasuries to their nodal agencies (SNAs) for the scheme.
In the meantime, the Centre is taking various initiatives to plug leakages, which some estimates suggest could be around 30% of the annual spending in the scheme.
From January 1, 2024, the government has made the Aadhaar-Based Payment System (ABPS) mandatory for payment of wages. Under the ABPS, the Aadhaar of a worker is linked with her MGNREGS job card and bank account.
Direct benefit transfer (DBT) has saved an estimated Rs 42,534 crore on wages on account of the deletion of duplicate, fake/ non-existent, ineligible beneficiaries till March 2023.