Workers in soup as MGNREGS caught in Centre-TN dispute
This cut has had a direct impact on workers' wages, with reports of payments as low as Rs 30 in some rural pockets. Ironically, many workers are spending more on travel to the worksite than they earn in wages.;
CHENNAI: The Union Government has approved only 12 crore persondays for Tamil Nadu under the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) for the 2025–26 financial year, significantly lower than the 35 crore persondays proposed by the Tamil Nadu Government, based on a bottom-up assessment of rural employment needs and the labour budget.
This cut has had a direct impact on workers' wages, with reports of payments as low as Rs 30 in some rural pockets. Ironically, many workers are spending more on travel to the worksite than they earn in wages.
The drastic reduction in persondays is expected to hamper the implementation of the 100-day employment guaranteed under the MGNREGS. In addition, the Centre has yet to release Rs 2,893 crore in pending funds—meant to cover wages for 9.93 crore persondays and material costs exceeding Rs 957 crore as on March 12 this year. "Now, the due amount has crossed Rs 4,000 crore," said a source.
"This is a national trend and they (the Union Government) are following the same pattern across all states. Officials told us the remaining persondays will be released once we complete the approved 12 crore," said a highly placed source privy to the communication between the state and Centre. He, however, did not rule out the possibility of political motives behind the delay, given the strained relationship between the state and central government.
Government officials and labour activists have raised red flags, warning that the scheme is drifting away from its core purpose as a demand-driven employment safety net for the rural poor—particularly women from marginalised communities. They cite delays in fund allocation and poor implementation on the ground as key reasons for the scheme's declining impact.
"The scheme is caught in a political mire between the state and Centre. There is growing uncertainty at the grassroots," the source said, citing low wages in Kilankunam village in Tiruvannamalai's Gengampoondi panchayat, where workers were reportedly paid just Rs 30 to Rs 40 per day in the last week of February.
Similar issues have been reported in 61 village panchayats in the Vandavasi block of Tiruvannamalai. "We found that wages were below Rs 50—far short of the mandated wage rate of Rs 319, which came into effect in March 2024—in the northern districts," the source said. He also noted that workers in Prathabaramapuram in Nagapattinam district have not received wages since December 2024. "This is the situation across the state."
A senior government official pointed out that the Union Government had approved a labour budget for 20 crore persondays for 2024–25. However, due to an overwhelming response, the state achieved 29.93 crore persondays as of 12 March this year, with a total expenditure of Rs 10,518 crore. Although the state submitted an additional labour budget for 20 crore persondays, the Centre has yet to approve it—despite a formal request from Chief Minister MK Stalin.
"There was no such problem until 2023–24, when the Union Government approved additional labour budgets. But since December last year, the scheme has been in trouble due to lack of funds. Wage disbursements have been irregular. Now, the Centre has approved less than 50% of our proposed labour budget and continues to withhold pending dues," the source said.