Did the Mahatma Gandhi National Rural Employment Guarantee Act, 2005 (MGNREGA) raise rural wages and productivity during its pan-India operation since April 2008? One of the key objections to the recasting of the Act as the Viksit Bharat – Guarantee for Rozgar and Ajeevika Mission (Gramin) Act, 2025 (VB-G RAM G) is the claim that the former had raised minimum wages in rural areas, particularly through non-farm income. It is also argued that productivity increased, implying that MGNREGA was most impactful in the regions where it mattered.

Incidentally, the report of the Sixteenth Finance Commission has also apparently recommended reimagining the role of MGNREGA. The report was submitted to the President last month. No officials were willing to speak on its contents, as it has not yet been tabled in Parliament.

However, data from the periodic NSSO-conducted Annual Survey of Unincorporated Sector Enterprises (ASUSE) and from state government budgets do not bear out this hypothesis. As one of the world’s largest state interventions in the lives of the poor, the lessons learnt from MGNREGA could, in theory, be replicated across nations of the Global South.

First, let us look at wages. Wages in rural areas across India for non-farm work rose rapidly between FY11 and FY16 but clearly decelerated thereafter. The NSSO ASUSE data (Table 1) shows this trend.

Yet, as annual........

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