#DataViz: Unpaid Wages, Fund Delays Persist Under MGNREGS

Such wage delays and financial shortfalls in MGNREGS have persisted for years, IndiaSpend had reported earlier. Issues like glitchy digital attendance systems have led to further losses. Fund shortages also remain a challenge, leading to only a small percentage of households receiving the full 100 days of work each year, we had reported.

In five charts, we look at the state of the scheme, which completes 20 years of implementation this year.

Budgets stagnant

The government has revised the MGNREGS budget allocations over the years as demand for work has grown, stating that it is a demand-driven scheme. In 2020-21, the initial budget estimate was Rs 61,500 crore, but the revised allocation surged to Rs 1,11,500 crore due to the pandemic, which led to a record work demand. A similar pattern followed in subsequent years.

Despite these budget adjustments, actual expenditure surpasses the allocated funds. In 2023-24, the spending reached Rs 89,153 crore against a revised estimate of Rs 86,000 crore. For 2024-25, the revised estimate remains unchanged at Rs 86,000 crore and lower than 2023-24 actual expenditure by 4%, as per 2024 -25 Union budget documents.

Rajendran Narayanan, associate professor at Azim Premji University, told IndiaSpend, "It means the government has not given enough money for the programme. It implies two things. There has been higher demand and more employment through NREGA. Arbitrary mechanisms such as 'Approved Labour Budget' have been used to curtail the budget."

Pending wages

Over the past five years, pending wages under MGNREGA have fluctuated, between Rs 512.75 crore in 2020-21 to Rs 974.38 crore in 2024-25, reflecting ongoing delays in payments. In 2024-25, there was a net balance of Rs -18,361.19 crore, highlighting continued financial strain on the programme.

Narayanan explained, "Negative balance in the financial statement indicates that workers have worked but are still waiting to be paid and material payments are also pending. If the negative balance remains from the previous year, it means that those workers have still not received their wages.”

The December 2024 Standing Committee report on Rural Development and Panchayati Raj expressed concerns over delays in wage payments under MGNREGA--workers are legally entitled to payments within 15 days. The committee urged the rural development department to improve its financial mechanisms to ensure the timely release of MGNREGA funds. In January IndiaSpend reported that the standing committee report highlighted the wages paid under the MGNREGS since 2008 to be “inadequate and not in consonance with the rising cost of living”.

Impact of wage delays on MGNREGA participation

In 2024-25, while 61.7 million households demanded work under MGNREGA, only 55.4 million actually availed it, despite 61.5 million being provided employment. A similar pattern was observed in 2023-24, with 65.1 million households demanding work, but only 59.9 million availing it.

Among individuals, 86.1 million persons demanded work in 2024-25, while 85.9 million were provided employment, yet only 75.1 million availed it. Wage delays and administrative challenges can be key reasons affecting participation, as seen in previous years. IndiaSpend has reported on MGNREGS workers who were protesting in Bihar demanding an investigation into corruption, resolution of delayed wage payment, redressal of unavailability of work, and the resolving of issues concerning job cards, bureaucratic hurdles by block officers etc.

Unemployment Allowance

In 2024-25, Rs 5.51 lakh in unemployment allowance is still unpaid. Over the past five years, the total pending amount has reached Rs 3.21 crore. Every year, a significant portion of the allowance remains unpaid, adding to the backlog.

Under Section 7 of the MGNREGA Act, 2005, if a worker who has demanded employment is not provided work within 15 days, they are legally entitled to receive an unemployment allowance from the state government.

The Supreme Court, in a 2016 judgment, reaffirmed that unemployment allowance must be paid if work is not provided within 15 days under MGNREGA. The judgment stated that failure to provide timely wages or unemployment allowance violates workers' rights under the Act and directed states to ensure compliance.

State Disparities

Programme data from the MIS report show that wage payments remain pending across multiple states, with some states reporting significantly higher dues. Maharashtra (Rs 379.98 crore) and Bihar (Rs 66.84 crore) have the highest pending wages, with 7.9 million and 9.7 million active workers, respectively.

Additionally, several states face deep financial deficits, with Tamil Nadu (Rs -3,440.99 crore) and Uttar Pradesh (Rs -2,770.66 crore) among those with the highest negative net balances, highlighting severe funding shortages.

The 2024-25 standing committee report has urged the rural development department to improve its financial mechanisms for the timely release of MGNREGA funds. It also stated that proper implementation of the scheme totally hinges on the timely and adequate release of funds to all the States/UTs. In the 2023-24 report too, the committee noted that the pruning of funds at budget estimate stage has a “cascading effect on various important aspects such as timely release of wages, release of material share etc. which have a telling impact on the progress of the scheme”.

Note: The numbers in this story are based on data available as of March 2, 2025.

We welcome feedback. Please write to respond@indiaspend.org. We reserve the right to edit responses for language and grammar.