Why a Calcutta court ordered the Centre to release MGNREGA funds

India Today

5 hours ago

After nearly three years of political standoff and administrative impasse, the Calcutta High Court on June 18 directed that the 100-day rural employment guarantee scheme (MGNREGA) be resumed in West Bengal from August 1. The verdict comes as a significant breakthrough in a long-running dispute between the Centre and the state, marked by allegations of corruption, political bias and denial of rights to millions of rural workers.The conflict began in the wake of corruption allegations in the implementation of MGNREGA in Bengal, prompting the Narendra Modi government to halt all funding to the state under the scheme. Since then, not a single rupee has been released, effectively suspending the programme and impacting the livelihoods of lakhs of rural families dependent on it. While the Centre justified its actions citing misuse of funds, the state government led by Chief Minister Mamata Banerjee, and even political rivals like the Left, have accused the Union government of engaging in selective non-cooperation and politically motivated discrimination.advertisementThe high court's intervention may mark a turning point. During the hearing on June 18, Chief Justice T.S. Sivagnanam offered a stern yet nuanced observation: 'From the beginning, I've said one thing— out of 10 apples, a few may be rotten, but the rest are still fresh.' Acknowledging the past issues but refusing to let them justify continued inaction, he added, 'What has happened is in the past. But the scheme has remained shut for nearly three years. Now it must be restarted. The Centre cannot indefinitely suspend this programme.' He further instructed that the possibility of resuming the scheme from July or August be seriously examined.The judgment also clarified that while the Centre has the authority to impose supervisory mechanisms to curb corruption—including conditions or monitoring arrangements—it cannot use such powers to indefinitely stall an entire welfare programme that affects millions. This assertion directly challenges the Union government's prolonged withholding of funds, despite similar corruption charges having emerged in several other states, including in the Hindi belt and even in Gujarat, without those states facing such drastic punitive action.advertisement
Reacting strongly to the court's ruling, CM Mamata launched a fierce critique of the Centre's stance. Addressing the media from Nabanna—the state secretariat—she said, 'We will review the petition, but first, they must release the money. It's been four years. Not a single rupee has been given. This is the people's money.' She accused the Centre of inflicting deliberate harm on Bengal's rural poor and declared that the state government had to pay the pending wages of workers from its own funds in the absence of central support. Since 2022, the state government has paid Rs 16,637.03 crore as wages from its own coffers, besides clearing pending wages of Rs 3,732 crore under MGNREGA.Mamata demanded reimbursement of these expenditures, stating, 'From the day the scheme was stopped, the Centre must calculate and pay the dues. Why was our money diverted to other states? That is a crime.' She also referred to the state's 'Karmashree' initiative, launched to provide employment using state funds as a substitute for MGNREGA.In its submission to the court, the Union government maintained that it had no intent to punish genuine workers, but raised the issue of verification—questioning who would confirm whether work was indeed carried out. It also insisted that the funds allegedly misused by the state be returned and called for the appointment of a central nodal officer to oversee the programme's implementation in the future.advertisementHowever, this argument appeared unconvincing to many observers and legal analysts. The primary question raised was: if the Centre was serious about ensuring oversight and integrity, why did it take nearly three years to propose such mechanisms? Moreover, who bears responsibility for the economic hardship endured by the rural poor during this extended suspension?The state, for its part, argued that no nodal officer was needed, as the entire scheme was administered through centralised digital portals, making discrepancies immediately visible and rectifiable. While this stance underscores the growing role of technology in welfare governance, it does not fully absolve the state government of blame. Repeated allegations of corruption in Bengal's MGNREGA implementation have surfaced over the years, and critics argue the state failed to act with adequate urgency to stem malpractices before the situation escalated into a full-blown intergovernmental deadlock.Still, despite these mutual shortcomings, the court's directive is being viewed by many as a positive development—a long-awaited reprieve for lakhs of marginalised workers and families in West Bengal's villages. The court has reasserted a crucial democratic principle: even amid allegations and administrative friction, the rights of the people to livelihood and public welfare cannot be indefinitely held hostage.advertisementAt its heart, the impasse over MGNREGA funding is not merely a matter of financial disbursement or administrative oversight—it is a microcosm of the increasingly fraught relationship between the Centre and opposition-ruled states. It reflects how welfare, accountability and political rivalry intersect in contemporary India, and how institutional checks—such as the judiciary—remain vital in upholding constitutional guarantees when executive action fails to do so.As August approaches, much will depend on how both governments respond—not only in terms of implementing the court's order, but also in restoring the dignity and stability of a social security scheme that was never meant to be a political battleground.Subscribe to India Today Magazine