Possible UPSC Questions
- GS III (Economy): Discuss the recent cap on MGNREGS expenditure and its implications for rural distress in India.
- GS III (Agriculture): “Agriculture in India is a fallback sector rather than a vibrant engine of growth.” Examine with reference to wage trends and employment patterns after 2020.
- GS II (Governance): Evaluate the role of MGNREGS in alleviating rural poverty and the challenges it currently faces.
Quick Outline of Key Facts
| Indicator | Current Situation |
| MGNREGS cap | 60 % of annual outlay restricted to April–Sept 2025 (first-ever cap). |
| Rising demand | Households seeking work: 26.39 mn (Jun 2024) → 27.59 mn (Jun 2025) ↑ 4.5 %. |
| Actual work supplied | Avg. 52 days/HH in 2023-24 vs. mandated 100. |
| Agriculture share in employment | 46 % (2023-24) but only 16 % of GDP. |
| Real wage trend | Stagnant/contracting rural wages; high rural inflation. |
| Return to agriculture | Agri-employment rose from 42.5 % (2018-19) to 46.1 % (2023-24) as a “buffer” post-Covid. |
| Average rural incomes (NABARD 2022) | Agri HH: ₹13,661 pm; Non-agri HH: ₹11,438 pm. |
| Green Revolution legacy | Productivity gains but regional inequities, ecological stress, rising costs. |
| Non-farm sector | Mix of growth-pull (consumption linkages) & distress-push employment. |
Summary (≈ 250 words)
The Union Rural Development Ministry has, for the first time, capped Mahatma Gandhi National Rural Employment Guarantee Scheme spending at 60 % of its FY 2025-26 budget for the April–September period. Because nearly one-fifth of every year’s first-half allocation typically clears wage arrears, the new ceiling risks constricting fresh employment precisely when demand peaks during the agricultural lean season. Demand already outstrips supply: average MGNREGS employment fell to only 52 days per household in 2023-24, while households seeking work rose 4.5 % year-on-year this June.
These pressures mirror deeper rural distress. CMIE data point to stagnant real farm wages, elevated rural inflation, and subdued consumption. Agriculture still absorbs 46 % of India’s workforce but delivers just 16 % of GDP. Post-Covid, millions of return migrants fell back on low-productivity farm jobs, pushing agriculture’s employment share up by almost four percentage points since 2019.
Historically, the Green Revolution spurred output and some rural non-farm growth via consumption and backward linkages, yet it also created regional imbalances, ecological strain, and rising cultivation costs. Many smallholders now borrow heavily for inputs, and those squeezed out of decent farm incomes seek low-paid non-farm work or MGNREGS employment—the “distress-push” phenomenon.
Thus, limiting a demand-driven safety net without parallel boosts in rural livelihoods—such as higher public investment in irrigation, storage, climate-resilient farming, and genuinely labour-absorbing non-farm enterprises—risks aggravating poverty and migration.
Significance to the UPSC Exam
- Economic & Social Issues: Integrates themes of jobless growth, rural inflation, wage dynamics, and welfare policy design—frequently tested in GS III and Essay papers.
- Governance & Public Policy: Illustrates how expenditure caps can dilute a rights-based programme, relevant for questions on fiscal federalism and social sector budgeting.
- Agriculture & Inclusive Growth: Highlights structural challenges in Indian agriculture, the legacy of the Green Revolution, and the necessity of climate-resilient, employment-intensive reforms—core to GS III agriculture questions and optional papers (Economics, Sociology, Agriculture).
