India’s rural employment guarantee framework is globally recognized as a landmark in social security. On paper, it stands as a safety net promising dignity, income security, and livelihood support to the rural poor. Yet the widening chasm between its stated objectives and ground-level realities exposes a deeply troubling contradiction.
For the 2025–26 financial year, the Government of India allocated ₹86,000 crore (approximately ₹860 billion) for the rural employment guarantee programme in the Union Budget. That scale of public spending demands accountability.
The question, therefore, must be asked bluntly: is the programme faltering because of administrative inefficiency—or is inefficiency itself the mechanism that allows the system to survive?
The Labour Market Contradiction
The scheme rests on a foundational assumption—that rural employment is scarce. That assumption, however, is increasingly contradicted by market realities. Across regions such as the Telugu states, the private sector—farmers, contractors, construction firms, and industrial units—is struggling to find workers. Daily wages range from ₹700 to ₹1,200, with many employers offering 300 or more days of work annually.
If the market is willing to pay higher wages for longer periods of employment, why does the state insist on running a parallel system that struggles to provide even 100 days of work at lower wages? This dissonance suggests that the programme is no longer driven by economic necessity, but by a system of managed dependency.
Indicators of a Structural “Leak”
When a programme consistently delivers poor outcomes despite massive public expenditure, it begins to resemble a structurally embedded public drain rather than a welfare mechanism.
Paper-thin assets: Independent audits and field reports frequently uncover ghost muster rolls, recycled worksites, and assets that either do not exist or lack durability. In any private enterprise, this would be called billing without delivery.
Engineered delays: Wage delays appear less like administrative lapses and more like a design feature. By normalising violations of statutory payment timelines—without imposing penalties—the system creates a prolonged “float” on public funds while diluting accountability at the local level.
Resistance to transparency: A system that absorbs abuse so effortlessly is rarely accidental. Opacity appears less like a flaw and more like an operational requirement.
The Litmus Test: The PPP Model
The strongest indictment of the current framework is its deliberate rejection of Public-Private Partnerships (PPP). If genuine employment generation and durable asset creation were the goals, the solution is obvious: engage agri-enterprises and contractors to provide supervision, productivity, and accountability, while the government covers the wage component.
More radically still, the state could act merely as a facilitator—connecting job seekers with private employers willing to pay the scheme’s prescribed wages from their own resources. Such an approach could eliminate the need for massive government expenditure altogether.
That these models are consistently rejected is revealing. A transparent, employer-linked system would:
- Collapse the entrenched muster-roll economy
- Eliminate bureaucratic rent-seeking
- Ensure timely—daily or weekly—wage payments
- Transform beneficiaries from dependent recipients into independent earners
The Political Economy of Dependency
The prevailing disorder is often defended as “scale complexity.” In reality, it functions as a vote-management instrument. Complexity ensures that the poor remain dependent on political mediation to access what is legally theirs.
Any programme that resists transparency, rejects efficiency, and avoids output-based accountability ceases to be welfare. It becomes an institutionalised disorder, protected precisely because too many stakeholders benefit from its continuation.
Conclusion: When Inefficiency Is Intentional
A public scam does not always require forged signatures or stolen files. It can thrive on normalised inefficiency and institutional inertia. When public money is spent year after year without proportionate outcomes—and when demonstrably superior models are consciously ignored—the burden of proof shifts squarely to the state.
This is not an argument against welfare. It is an argument against welfare without outcomes. If employment can be guaranteed through transparent, efficient mechanisms but is deliberately not, the conclusion is unavoidable: the inefficiency is not accidental. It is intentional.
