Economists and activists have raised a significant financial alarm over Karnataka's newly proposed rural employment scheme. They state that the state will need to spend an additional Rs 2,100 crore every year under the Grama Rozgar and Mahatma Gandhi (G RAM G) scheme to generate the same level of jobs that were provided under the central Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA). This stark assessment was presented by the NREGA Sangharsh Morcha and economists on Friday.
The Financial Burden of a Changed Funding Model
The primary driver of this increased cost is a major shift in the funding pattern. Under MGNREGA, the central government bore 90% of the wage cost, with the state contributing only 10%. The G RAM G scheme flips this ratio, requiring the state to shoulder 40% of the financial burden. For the 2024-25 fiscal year, Karnataka spent Rs 6,824 crore under MGNREGA, of which the Centre contributed Rs 6,251 crore and the state Rs 573 crore.
Experts have calculated that to maintain last year's employment level, the same quantum of work would now require the Centre to spend Rs 4,095 crore, while Karnataka's share would balloon to Rs 2,100 crore. This represents the additional Rs 2,100 crore annual outlay for the state treasury.
Experts Warn of Dire Consequences and Planned Protests
Senior economist and former IIM-B faculty member, Vinod Vyasulu, highlighted an even more daunting scenario. He pointed out that if the scheme were to guarantee work for all 80.9 lakh registered households for the full 125 days, the state's annual expenditure could skyrocket to nearly Rs 20,000 crore. Vyasulu cautioned that this added burden comes when Karnataka has limited avenues to raise its own revenue, relying heavily on GST, income-tax devolution, and central transfers. This strain could potentially cripple funding for other critical welfare schemes.
In response, the NREGA Sangharsh Morcha has announced plans to hold statewide consultations and protests over the next two months, demanding a complete rollback of the G RAM G scheme. Advocate Clifton Rosario revealed that agricultural unions will hold meetings on January 5, while broader trade unions plan to oppose G RAM G during a nationwide mobilisation against labour codes on February 12.
Grassroots Voices Fear Wage Depression and Migration
Beneficiaries and labour groups on the ground expressed deep concerns that replacing MGNREGA with G RAM G will depress rural wages and accelerate distress migration from villages to cities. Suvarna Kuthale of Jagrutha Mahila Okkoota in Khanapur noted that women constitute about 80% of MGNREGA workers in her village. She emphasised that MGNREGA ensured equal wages for men and women and provided a legal right to demand work.
"While farm labour pays between Rs 150–200 per day, MGNREGA guarantees Rs 370," Kuthale said. She also praised the decentralized structure of MGNREGA, which allowed local panchayats to undertake essential local works like building playgrounds and desilting irrigation canals.
Nikhil Dey, founder-member of Mazdoor Kisan Shakti Sangathan, criticised G RAM G for prioritising large infrastructure projects aligned with national programmes, while neglecting essential local works that connect marginalised communities to basic services. Mahantesh of the Gramin Coolie Karmikara Sanghatane in Raichur added that while MGNREGA had initially reduced migration from the region, recent payment delays were already pushing workers towards low-paying urban jobs.
Experts have issued a final warning: villages that had previously seen a reduction in large-scale migration could once again face depopulation if stable rural employment opportunities decline under the new scheme.
