India’s slow shift from legal guarantees to discretionary welfare is reshaping the lives of its poorest citizens

The story of governance in India today is not one of abrupt withdrawal, but of gradual retreat. Over the past eleven years, India’s welfare framework has undergone a subtle transformation. Landmark rights-based laws remain formally intact, yet their everyday operation increasingly depends on administrative discretion, fiscal capacity, and shifting policy priorities. Public assets remain publicly owned, but are progressively monetised; employment is guaranteed in law, but constrained in practice. For millions of low-income households, this shift is experienced less as reform and more as uncertainty — about work, wages, food security, and dignity. For example, a landless worker in Bihar may wait weeks for MNREGA work during sowing season, unsure if wages will cover basic household expenses.

This change is evident in the ongoing debate around restructuring the rural employment guarantee, which highlights a wider reorientation of the state’s role — away from enforceable social rights and towards conditional, budget-mediated support.

Rights on Paper, Discretion in Practice

Several rights-based legislations enacted in the previous decade illustrate this shift. The Right to Information Act continues to exist, but prolonged delays in filling vacancies in information commissions, alongside expanding procedural requirements, have reduced its effectiveness. The Right to Education remains law, yet amendments and relaxed enforcement of teacher and infrastructure norms have diluted its character as a fully justiciable entitlement. The National Food Security Act still supports a vast population, but frozen beneficiary lists despite population growth, tighter authentication requirements, and uneven state implementation have limited real access in many regions. In some districts, villagers report having to travel several kilometres multiple times to confirm their eligibility, highlighting everyday challenges beyond the policy text.

What connects these developments is not repeal, but a change in how rights are operationalised. Entitlements designed as enforceable claims against the state increasingly function as policy commitments subject to fiscal ceilings and administrative judgement. Responsibility is shared between the Centre and states, but accountability becomes diffuse — making failure easier to explain than to correct.

From Privatisation to ‘Monetisation’

This evolution coincides with a broader economic strategy that favours asset monetisation over direct state provisioning. Roads, railways, ports, power infrastructure, and logistics assets are leveraged to raise capital and ease fiscal pressure. Supporters argue that monetisation does not necessarily imply outright privatisation, and that it can improve efficiency while retaining public ownership. Critics counter that while revenues are immediate, reduced public control over infrastructure can have long-term consequences for affordability, access, and employment generation. Supporters argue that monetisation can improve efficiency while retaining public ownership; critics caution that reduced public control may affect affordability and access.

In a labour-surplus economy where private investment has not consistently absorbed new entrants into the workforce, the state’s retreat from ownership and direct employment places greater weight on social protection systems. It is here that the tension becomes evident: as the public sector narrows its productive role, the need for robust welfare guarantees grows — even as those guarantees are being recalibrated.

MNREGA and the Strain on a Guarantee

The proposed changes to the Mahatma Gandhi National Rural Employment Guarantee Act (MNREGA) bring this contradiction into sharp relief. MNREGA was conceived as a demand-driven, legal guarantee of up to 100 days of work per rural household. While the Act itself remains unchanged, critics argue that its functioning has gradually moved away from this original spirit.

Three developments are central to this concern. First, although MNREGA wages are periodically revised, they have often lagged consumer inflation over the past decade and, in several states, remain below prevailing market or statutory minimum wages. Second, while the law does not prohibit work during peak agricultural seasons, administrative advisories discouraging such work frequently translate into fewer projects being opened on the ground. Third, proposals to move towards a 60:40 cost-sharing structure increase the fiscal burden on states, particularly those with limited revenue capacity and high demand for rural employment.

Individually, each measure can be defended as administratively or economically rational. Collectively, critics argue, they risk transforming a rights-based employment guarantee into a budget-constrained programme. For landless labourers, women, older workers, and those in mechanised or climate-affected regions, agricultural employment is neither assured nor sufficient even during peak seasons. When MNREGA availability contracts alongside stagnant wages, workers’ bargaining power weakens sharply. Families dependent on these wages often have to skip meals or borrow from informal lenders, reflecting the tangible stakes of policy shifts.

The Government’s Case

The government’s defence rests on economic pragmatism. It argues that unrestricted MNREGA work during sowing and harvesting periods can distort rural labour markets, raise costs for small farmers, and undermine agricultural productivity. Greater state participation in funding is framed as cooperative federalism and fiscal responsibility, while restructuring the programme is presented as a shift from short-term wage employment towards durable assets and sustainable livelihoods. Concerns about leakages and long-term fiscal sustainability also feature prominently in official reasoning.

These arguments are not without coherence. Public employment programmes must coexist with market realities. Yet critics respond that the purpose of a rights-based law is precisely to protect citizens when markets fail. When access to work depends on seasonal advisories, state finances, or administrative discretion, the legal guarantee weakens — even if the statute remains intact.

The Arithmetic of Growth

These policy shifts unfold alongside headline economic indicators that present a more optimistic picture. GDP growth rates have remained strong by international standards, while official estimates show a decline in unemployment. At the same time, labour force participation remains subdued, informal employment dominates new job creation, and real wage growth has been uneven across sectors. Nearly 80 crore people continue to rely on government food support, underscoring the scale of economic vulnerability that persists beneath aggregate growth figures. Labour force participation remains subdued, informal employment dominates, and real wages are uneven, while nearly 80 crore people rely on government food support, highlighting persistent vulnerability.

Statistics illuminate trends, but they can also obscure distributional realities. When people stop looking for work, unemployment falls on paper. When welfare support becomes long-term rather than transitional, it signals structural fragility rather than resilience.

What Is at Stake

The debate over MNREGA is therefore not merely about one programme. It reflects a deeper shift in the philosophy of governance — from welfare as a legal entitlement to welfare as a conditional policy instrument. A rights-based framework treats social protection as a matter of justice; a discretionary framework treats it as a function of affordability and administrative choice.

Economically, the latter may offer flexibility. Politically, it concentrates decision-making power. Socially, it transfers risk from the state to individuals least able to bear it. When rights slowly become options, citizenship itself becomes conditional. In villages, small towns, and urban outskirts alike, this difference shapes daily decisions about food, schooling, and work — choices that no statistic fully captures.

India’s challenge is not simply to grow faster, but to decide what growth is allowed to replace. If legal guarantees weaken, welfare dependence hardens, and public assets steadily recede from public purpose, the social contract quietly changes. The cost of that change will not be borne by balance sheets alone, but by those for whom the difference between a right and an option is the difference between security and survival.

 (Views are personal.)

(The writer is a retired officer of the Indian Information Service and a former Editor-in-Charge of DD News and AIR News (Akashvani), India’s national broadcasters. I have also served as an international media consultant with UNICEF Nigeria and been contributing regularly to various publications)