The new government in West Bengal is yet to be sworn in, but the Union Rural Development Ministry is already discussing ways in which two major rural welfare schemes, the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) and the Pradhan Mantri Awas Yojana Gramin (PMAY-G), can be revived in the state, senior ministry officials said.
They, who requested anonymity, added that the discussions began on Tuesday, as the Bharatiya Janata Party won the state assembly elections, the results of which were announced on Monday. Once formalized, the reboot process is expected to open $3,082.52 crore of the state’s frozen MGNREGS liabilities, in addition to the outstanding PMAY-G dues of $4,900 Crores.
Union Rural Development Minister Shivraj Singh Chouhan said resumption of the schemes is imminent. “Now all the development will be done at a fast pace. The funds were stopped due to irregularities by the state government – the state government did not take any action against the officials. The funds were meant for the poor, not for misuse. They have changed the name of the scheme to Bangla Awas Yojana. Now under the BJP government, these schemes will be resumed and 50-80 lakh families who have no work will benefit under NREGS,” Chouhan said, adding that rules and guidelines for both the schemes have been finalized and will be rolled out very soon.
West Bengal has been among the biggest beneficiaries of MGNREGS – a scheme that ensures employment opportunities for rural families. In 2020-21, the state received $9,397.68 crore under the wages component of the scheme, making it the single largest recipient at the national level, ahead of Rajasthan ( $8,097.76 crore) and Uttar Pradesh ( $7,817.58 Crores). The following year, 2021-22, he received it $5,645.91 Crores. Millions of rural workers in the state relied on the scheme for daily livelihood.
Then in March 2022, everything stopped. The Union government has frozen all funds to West Bengal from March 9, 2022, citing Section 27 of the MGNREGA Act, 2005 – a provision that allows the Center to withhold funds in case of non-compliance. The Center alleged widespread corruption in the implementation of the scheme: fake job cards, fake beneficiaries, and repeated refusal to follow central directives on how to run the scheme. According to official data, outstanding liabilities as of March 8, 2022 – money that has been committed but not repaid – totaled $3,082.52 crore, including $Rs 1,457.22 crore of unpaid wages to workers, $1,607.68 crore under the physical component, and $Rs 17.62 crore under administrative costs. Neither the Centre, which bears 90% of wage costs, nor the state, which contributes the remaining 10%, released their shares after the freeze.
Under PMAY-G — a scheme that provides financial assistance to rural families to build a pukka (proper) house — the Center has stopped funding West Bengal from November 2022 after central inspection teams found irregularities in implementation. The immediate trigger was the TMC government’s renaming of the scheme Bangla Awas Yojana, violating central guidelines that had imposed the Prime Minister’s name and picture on houses built under the programme. Allegations of selecting ineligible beneficiaries exacerbated the conflict. West Bengal proposal to release $Rs 4,900 crore under PMAY-G has not gone anywhere. The cost-sharing ratio between the center and the state is 60:40; Follower $Rs 4,900 crore was proposed, which was the central share $2940 crores and the state’s share in $1,960 crores. No amount has been released. The pause affected the approval of more than 4 million housing applications in 23 regions.
According to the proposal discussed on Tuesday, the ministry is considering sharing a structured payment framework with the new state government. The above-mentioned officials said the idea is to ask the state to “liquidate its share of the outstanding dues in the upcoming state budget or in interim installments if a one-time settlement is not possible.” The new state government will also be asked to restore the original names of both the schemes – with PMAY-G dropping the renamed state versions, as a pre-condition before releasing any funds, they added. Once the official restart order is issued, the ministry will direct the funds directly to the West Bengal Rural Development Department, which will then distribute it to the districts and beneficiaries.
The Center took an earlier step towards normalization in December 2025 by issuing an order approving the resumption of MGNREGS in West Bengal subject to mandatory compliance and certain conditions. However, according to Parliament’s response dated 2 February, the country did not submit the required working budget for 2025-2026 within the stipulated window of 30 days.
The three-year standoff between the then TMC government and the Center left millions of rural workers and housing beneficiaries in West Bengal without access to central entitlements. That may change now.
