Under Viksit Bharat Act, Kerala’s Contribution Would Rise to Rs. 1,481 Crore

New Delhi: Kerala is set to bear a dramatically higher financial burden under the newly enacted Viksit Bharat – Guarantee for Rozgar and Ajeevika Mission (Gramin) Act, 2025. It was stated in the reply furnished by the Government to the question raised by Dr. John Brittas, MP. In 2023–24, the State’s contribution to the existing rural employment scheme, MGNREGS, was Rs. 170.22 crore against a Central share of Rs. 3,532.57 crore. Applying the new 60:40 cost-sharing formula, Kerala’s contribution would rise to Rs. 1,481.12 crore for the same level of expenditure in 2026–27 almost nine times its current share.

This increase comes even before accounting for the expansion of guaranteed work from 100 to 125 days, which would further escalate the fiscal responsibility. Other States are expected to face similar pressures, though the impact is especially high for Kerala.

Over the past five years, Central allocations for MGNREGS have steadily declined from Rs. 1,10,519.91 crore in 2020–21 to Rs. 85,333.69 crore in 2024–25 a reduction of nearly 23% even as rural distress and unemployment persist. The Government has not provided projected allocations under the new law or a detailed breakdown of State-wise fiscal responsibilities.

Critics say that while the Act expands employment rights on paper, it shifts a substantial financial burden from the Union to the States, potentially straining their budgets and affecting the delivery of rural employment programs.

There has been a consistent delay in the release of total Central funds under MGNREGS over the past five years, resulting in a cumulative shortfall of more than Rs. 25,000 crore.