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CASI Reading List:
MGNREGA, Employment Guarantees, and the Indian Welfare State
By Yamini Aiyar & Rohan Venkat
February 16, 2026
In December 2025, Indian Prime Minister Narendra Modi’s government delivered a parliamentary surprise. With little notice and no public debate, the government introduced a bill to repeal a pioneering two-decade old rural employment guarantee act that had acted as a vital social safety net for millions of Indians. In its place, the government introduced and passed the Viksit Bharat-Guarantee for Rozgar and Ajeevika Mission (Gramin) Act—shortened to VB-GRAMG—which it claimed would update and improve on the now-repealed law that Modi once termed a “monument” to his predecessors’ failures.
With observers and researchers now setting out to understand how the new law will alter India’s rural economy, it is worth looking back to the history of the Mahatma Gandhi National Rural Employment Act (known variously as NREGA, MNREGA, and MGNREGA over the past two decades) to understand the significance of this path-breaking legislation and its impact on the Indian countryside.
India in Transition asked Yamini Aiyar, Senior Visiting Fellow at the Saxena Center for Contemporary South Asia and Watson Institute, Brown University, to put together a short reading list of key works for students and scholars to better understand NREGA and its role within India’s developing welfare state—including a recommendation of one of her own papers on the subject. Aiyar, most recently the author of Lessons in State Capacity from Delhi Schools (Oxford University Press, 2024), was previously president and chief executive of the Centre for Policy Research where she also set up the Accountability Initiative to study governance in social policy.
CASI Managing Editor Rohan Venkat spoke to Aiyar about the books and papers that she chose, from a welfare state classic that predates NREGA by more than a decade to an ethnographic look at how the employment guarantee law worked at the grassroots level, as well as her own scholarly journey in studying the landmark legislation.
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This is a canonical book for students of welfare. It was one of the most important attempts to create a typology of welfare states in the West. It’s an important theoretical device for students to understand the nature and form of the welfare state, and how they developed in Europe and the United States, especially in the post-Second World War context.
The MGNREGA is a very important illustration of the distinct nature of welfare regimes of the Global South. This is something that is not well understood in the theoretical literature. For students of welfare, increasingly now, there is an effort to better understand the dynamics of welfare in the Global South, and this is an important book to begin with. Not because it has anything about MGNREGA, but because it tells us broadly about how welfare states have been theorized, what we can learn from the Scandinavian models, the Western European models, and the means-testing US model. This helps us to think harder about locating MGNREA-like welfare, which has emerged in the Global South, in this broader frame. Do these models apply, or are there differences that we need to engage with?
It’s important for us to understand the evolution of welfare in the Global North, which was, in brief, a negotiated bargain between labor, capital, and the state. If you think about MGNREGA, the distinguishing feature was that it emerged not through a negotiated bargain between labor and capital as much as an “embedded” negotiated bargain where the key interlocutor was civil society. We have to note the role of social movements that didn’t anchor themselves in partisan politics but represented the voice of a set of ideas in the Indian context toward more universalistic norms and the recognition of social rights. Understanding these dynamics offer an important window into the very different context in which Global South welfare states were formed.
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It’s a bit of a cheat, because I couldn’t give you the entire landscape of work on MGNREGA. So, I pointed to this because it offers an overall view of the research done on MGNREGA. This is effectively an annotated bibliography of research done on the scheme and the act itself. Two things about this are unique. The reader will see immediately that this is one of the most widely studied programs, certainly in the history of Indian government schemes. But I would venture to say that along with Bolsa Familia (Brazil) and Progresa (Mexico), these three welfare interventions are among the most well-studied the world over, through a wide range of multi-disciplinary approaches.
Political scientists were interested in NREGA for one set of issues, economists for another set, sociologists were looking at it differently, and those involved in the practice of public policy were looking at it from a different perspective. And all these came together to give us a very important view of the role research plays in the process of policy praxis.
I also picked this because it reflected a natural next step to the embeddedness of civil society that shaped the MGNREGA in the first place. There was a coalition that came together involving a set of political actors and social movements that joined hands to craft the law. But then there was the hard task of implementation, which required both active civil society presence and also evidence and ground truthing from the field, to give policy-makers a better understanding of what’s actually going on. In classrooms and policy discussions, the evidence-to-public policy-making trajectory is often spoken about, but we don’t really know what that looks like in practice. And this was happening in those early days of the NREGA.
The Ministry of Rural Development—the nodal ministry in charge of implementing the program across the country—recognized this array of research. Like all governments, it didn’t like to be told things that it doesn’t want to hear, or that interfered with its political messaging. Yet it acknowledged this research and made it available to the people at large, through publications like this one. In the current environment, where uncomfortable truths that research and evidence may present are now becoming politically impossible, it’s important for us to look at documents like this and recognize their value. As students of politics, of development, of economics—it’s important to push the case for why this intertwining of research and policy is so important.
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This book is also related to my own personal journey with the scheme—I was interested in NREGA when it was first launched in 2006, especially in what it was attempting to do in terms of its governance architecture.
There are two ways in which to think about a welfare scheme. One is the obvious question of what it is doing as a social safety net; how it’s contributing, or not, to broader economic outcomes in the scheme design itself.
The other side of this was particularly relevant when the NREGA was being debated in India—how state capacity shapes the “type” of welfare that governments can commit to. This is fundamentally about governance. When MGNREGA was being debated, there were two camps. One was saying this is fiscal profligacy of the worst kind; yet another scheme that populist politicians love that is not going to do anything for the development of rural India. It sat in that old school imagination of trade-offs between welfare and growth. And what was legitimizing these arguments was the view that the implementation architecture in India is so weak and so easily captured by elites that you’d be better off just dropping cash from a helicopter than implement this large, clunky scheme that will just see money going into the wrong hands.
The response on the side of those pushing for the NREGA was that this was designed as an entitlement. It is a law because it is a right, and the right articulates a set of core entitlements that are going to create sites of demand-making and claim-making from the citizens, and through that process, place pressures on the state to ensure that the realities of corruption are addressed through people power. NREGA was being presented as much a governance experiment as an economic one. As a student of governance, I was particularly interested in the governance side of things.
I came across Rajesh Veeraraghavan during his field work. What’s really interesting about Patching Development is that it’s a book that looks at the governance story of NREGA and what we can learn about state capacity through this program. But it also brings in the technology element. The term “patching” comes from IT, and again this matters, because in today’s debate, we hear about Direct Benefit Transfers-JAM technology, and generally the tech pipeline is presented as a magic bullet to resolve governance challenges.
But what Patching Development actually tells us, in a very live way, is how technology is an enabler rather than an end in itself. It shows us how it is used by champions within the bureaucracy to identify implementation bottlenecks and consistently seek to “patch” them. That identification requires deep embedded participation of society in the process.
That’s why I think it brings together some of the arguments about how to think differently about state capacity, how to recognize the role technology can play—and also its limits—and the importance of societal participation and democratic processes in ensuring technology is a useful enabler to strengthen state capacity.
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This paper tells, with great depth, the story of the relationship between civil-society mobilization, rights-based laws, and how they came together to frame the NREGA. It does so through a very important and interesting project. I should add the caveat that the Saxena Center for Contemporary South Asia is involved in this project, which is currently my home institution, but that’s not what prompted me to pick this. The paper gives an interesting insight into the dynamics of accountability and governance—through this archive of primary documents from the early phase of the debates that took place in the elite political sphere as well as the imaginations and understandings of the key activists who played an important role in shaping the scheme.
That’s important because it brings to bear the key public debates that, at the present moment, we have forgotten or lost or gotten impatient with. It shows, in a deeply analytical way, the significance of civil-society movements, the media and politics coming together in shaping public discourse, which eventually creates a program that is then rolled out across the country.
The VB-GRAMG Bill was introduced in Parliament and pushed through with no debate. This paper is a reminder of the importance of careful public deliberation and its significance in shaping welfare. In addition, going back to where we began with Epsing-Andersen, this paper also gives us a more nuanced understanding of the form that the architecture of welfare starts taking in India. Again, this is not coming as a direct bargain between labor and capital, but is a bargain forged through social movements in the context of deep rural distress.
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This paper presents some of the most rigorous evidence that we have of the overall economic effects of the program. It is often forgotten in public debates that have preferred to define NREGA as a social safety net when, in fact, it was actually designed to serve as an important economic anchor for the rural economy. What we learn from this paper is its broader consequences in terms of poverty reduction, in enhancing the bargaining power of labor and therefore its contribution to wages; its overall infusing of a virtuous cycle of demand within the rural economy.
This is important because it is distinct from what cash transfers are doing. It is a reminder of the centrality of investing in the rural economy and that those investments are not “digging holes into nowhere” but substantially enhancing the productivity of the rural economy which, in turn, has huge positive impacts.
A related issue goes back to the VB-GRAMG, which has a clause that uses a start-stop approach to the employment guarantee during the peak agricultural season. One of the really important things to learn from this paper is that even large farmers are also involved in non-farm activity, and broader improvements of incomes within the rural economy plays a contributing role in setting off a virtuous demand cycle. This is an important counterpoint to the view that if, during the peak agricultural season, large landowning farmers have to pay higher wages, it affects their overall incomes. Instead, if you look at it more holistically, you see that NREGA, from its broader contribution to the rural economy, collectively enhances productivity across the board.
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One of the questions that often come up in terms of MGNREGA versus cash transfers has been about the rural assets it was supposed to build. This is a complicated issue because MGNREGA is about unskilled work and it has limits on the amount of spending that can be done on machines, for example, because it was seen as critical to ensure that wages were maximized. Often the asset-creation component of NREGA was dismissed as digging holes to nowhere, which then only needed to be filled up and dug again.
Without a doubt, in large parts of the country, less attention was paid to the asset-creating component of the program. There is a trade-off in the program. Very often, in moments of peak demand—given that NREGA is meant to ensure provision of work in times of distress such as during a drought period—it may result in a trade-off in the kind of assets that may be identified because it has to respond to immediate pressure for jobs. But that trade-off notwithstanding, in those parts of the country where an effort was made over the course of the year to identify assets and activities—particularly contour bunding, digging wells, work on small farms—you did see both improvements in environmental quality and productivity in land assets.
This is one of the few really good studies on the contribution of NREGA to asset-creation. In VB-GRAMG, the asset-creation element has been undermined somewhat, in that the array of works under which worksites can be opened have all been linked to the Viksit Bharat priorities. It has therefore become much more of an administrative exercise that takes place at a remove from where the work is to be undertaken, and that has broader implications for the role of rural local governments, particularly panchayats.
The MGNREGA mandated that 50 percent of the spending could be undertaken through the Panchayat, and would be based on a shelf of works developed by the gram panchayat through the mechanism of gram sabhas, a decentralized planning system. Now of course, this did not really unfold in many parts of the country. But at least a normative commitment to ensuring that rural local bodies played an important role in delivery—and that the works identified as priorities for the MGNREGA reflected local needs and priorities—was baked into the program. The VB-GRAMG turns this on its head and makes it a much more centralized program.
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This is a very deep, very rigorous, mixed-methods research study on the implementation of the program in Bihar. We know from data that there was a lot left to be desired from the implementation of the program, particularly in poorer states. That was one of the critiques the VB-GRAMG claims to be trying to resolve—that relatively richer states like Kerala, Tamil Nadu have been better at leveraging MGNREGA than poorer states like Bihar and Uttar Pradesh. And so the program is not reaching the people who need it the most.
This book gives a really good overview of what happens when an ambitious, almost utopian scheme is brought into a context of very weak state capacity and what its implementation failures are as well as its strengths. It does so using very rigorous evidence and is well argued. For readers who want to understand the complexities of implementing programs in a context of weak state capacity, what its pitfalls are, this is a very important book.
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One of the most unique elements of what MGNREGA was trying to do was that it emerged from a social movement, and the movement itself had experimented with and explored the praxis of citizen-led auditing that converted a citizen, momentarily, into an auditor of the government program. It did this through the Right to Information Act, allowing citizens to access documents related to public works programs or any other schemes that the government was implementing, and empower them, through these documents, to directly place claims of accountability on the state, verifying—as auditors tend to do—what is written on the books versus the reality on the ground. In the early debates about MGNREGA, state capacity, corruption, etc., the response from the Right to Work movement was that mechanisms like social audits need to be baked in as core entitlements of citizens to ask questions of governments and ensure that implementation is aligned with the entitlements of the scheme itself. Very soon after the program was launched in 2005, the government of then-undivided Andhra Pradesh actually took this social audit clause that was embedded in the law seriously and attempted to build a social audit system into the implementation of NREGA. So, along with my colleagues, I began to study this since it seemed quite unique that a bureaucracy was willing to open itself up, with political support, to greater scrutiny from the bottom up.
I was curious to understand what was happening. In its early days, we tried to understand how this was shaping awareness levels, citizen participation in the audit process, and citizen experience. We did a baseline survey before the social audits, then right after, and a few months after, and you could see the effects of this citizen-led mobilization that was being done through the state. My colleagues and I went back to the same sites five or six years later to try and understand how it got embedded in the system.
This paper looks at the social audit process as it unfolded, to try and understand its strengths and limitations, and at the heart of the argument, shows the complexity of trying to build sites of claim-making in a state where power and the capacity for the state to be responsive rests very far away from where the citizenry is. We try to bring out these contradictions. We also show how corruption itself responds to these dynamics, shifts, and evolutions, and we argue that it needs to be better understood.
It was a really fun paper to do because it gave us a long view of the process. We had the luxury as observers and chroniclers of this important moment to observe it both with some degree of commitment to the idea, but also the objectivity of a researcher that can see the limits of the process.
It furthered my understanding on the relationship between pressures from below, broadening and deepening participation and the structure of the state itself—a relationship we need to understand better to ensure implementation of welfare programs.
Yamini Aiyar is a Senior Visiting Fellow at the Saxena Center for Contemporary South Asia and Watson Institute, Brown University.
Rohan Venkat is CASI’s Managing Editor for India in Transition.
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India in Transition (IiT) is published by the Center for the Advanced Study of India (CASI) of the University of Pennsylvania. All viewpoints, positions, and conclusions expressed in IiT are solely those of the author(s) and not specifically those of CASI.
© 2026 Center for the Advanced Study of India and the Trustees of the University of Pennsylvania. All rights reserved.
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