It has been difficult to fathom why a government would decide to kill a golden goose that has been a crucial lifeline for nearly 26.5 crore workers and 15.5 crore rural households. In many ways, watching Parliament go through the motions of democratic dialogue while repealing the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) was shocking. Photo from the campaign days of Rozgaar Guarantee Abhiyan that began from Rajasthan in late 1990s. Photo: Mazdoor Kisan Shakti SangathanIn hindsight, however, it also revealed the determination of a government to take unilateral decisions regardless of their consequences on large numbers of vulnerable people. The details of the new law – Viksit Bharat-Guarantee for Rozgar and Ajeevika Mission (Gramin) (VB-G RAM G) – have also revealed what kind of economy is being built, whose lives are meant to be stabilised, and whose precarity is being treated as acceptable collateral damage.MGNREGA was never just a wage employment program. It was fought for by millions of rural workers – women, Dalits, Adivasis, landless labourers – as a collective assertion of rights. ‘Har haath ko kaam do, kaam ka poora daam do’ , the slogan, was not a demand for benevolence. It was a declaration that work, wages and dignity are not favours to be dispensed, but rights to be claimed.To understand what its repeal means, we must move beyond the language of policy tweaks and budgetary arithmetic. We must ask a more uncomfortable question – one that sits at the heart of democracy itself.Where does money come from, and who decides?Money does not only come from markets fully formed. It is, in fact, created, made available and regulated when the state chooses to spend via budgets, guarantees and policy decisions authorised within parliament’s fiscal framework. That is how money also becomes available to rescue banks, absorb corporate losses or guarantee infrastructure projects. In these moments, the consequences of scarcity are reduced and anxieties about affordability are also muted. Orthodox economics treats this as a routine measure to be taken, because it presents money as a neutral instrument of balancing markets rather than a political decision about whose claims are honoured.However, these standards suddenly change when it comes to wages, pensions, scholarships, and rural workers’ demand for work. When money is meant to stabilise lives rather than balance sheets, all kinds of alarmist predictions surface. This was evident even when MGNREGA was first proposed, when sections of the economic commentariat warned of fiscal ruin and inflation, with one prominent voice infamously suggesting that the money would be better spent if it were “thrown from a helicopter” rather than paid as wages to rural workers.The anxiety was never about the funds itself, but about who it was meant to reach. By framing money as scarce only when workers demand it, orthodox economics converts a political choice into a technical constraint, effectively silencing democratic claims over monetary design.MGNREGA disrupted this so-called “depoliticised monetary order” by re-opening money to democratic claim-making, allowing workers – long treated only as labour inputs – to act as political users of state-backed currency. When the state paid wages for public work, money entered the economy directly as income, not debt. It reached households that would otherwise survive through borrowing, migration or submission to exploitative labour at illegally low wages. This redesign was deeply redistributive. Women accounted for nearly 55–58% of total person-days under MGNREGA year after year, while Scheduled Castes and Scheduled Tribes together contributed close to 40% of total employment. Women’s participation in MGNREGA. Source: MGNREGA MIS reports and MoRD ReportsFor, perhaps, for the first time at this scale, public funds flowed predictably into households that were long excluded from secure labour markets, formal employment, and institutional access to income.It changed what orthodox market economics works hard to obscure: how money is created and distributed decides who is protected from hunger, debt, risks, and uncertainty – and who is left to live with them.Group of workers singing and demanding right to work at a dharna in Rajasthan in 2012-13. Photo: Mazdoor Kisan Shakti SangathanPolitical economist Jakob Feinig calls such moments “moral economies of money” – times when people collectively challenge unjust monetary arrangements and demand institutions that reflect life, dignity, and social purpose. MGNREGA was precisely such a moment for India. It made monetary policy far more responsive to democratic pressures.Demand, not permission: Two ways to design an economyMGNREGA rested on a deceptively simple principle: demand. A rural household could ask for work, anywhere and anytime, and the state was legally bound to respond. Money entered the economy because people needed it, not because a central authority approved it. This inversion of power was never comfortable for governments or local elites, and the program was repeatedly constrained through budget cuts, delayed payments, restricted access and administrative control. However, its economic impact must be understood in spite of these efforts to blunt it.A group of women workers demanding right to work at a dharna in Rajasthan in 2012-13. Photo: Mazdoor Kisan Shakti SangathanAt its peak, this demand-led design meant that between Rs 50 lakh and Rs 2 crore flowed annually into a single gram panchayat, depending on size and need. This was not abstract spending or mere asset creation. It was aggregated purchasing power earned by people. Wages paid under MGNREGA circulated immediately through local markets – into food, transport, tools, health expenses, and small services – shaping economic life at the village level in ways no centrally planned infrastructure project could. Several empirical studies find that the program has large indirect effects on rural consumption beyond direct wages, with increases in household spending often many times the initial income gains – for instance, evidence of substantial indirect consumption impacts has been documented in rigorous welfare research on MGNREGA.The VB-G RAM G Act reverses the principle. The generation of work will no longer be based on demand; it will follow top-down allocations. Panchayats will be selected, seasons of “no work” fixed from above. Coverage is conditional. This is not a technical redesign or reform. It is a shift from rights to permission and discretion.This shift matters because demand-led systems stabilise economies from the bottom up. They respond to lived distress. Supply-led systems ration money from the top down. They assume distress can be scheduled, managed and ignored.In both cases, money is created. The difference lies in who gets to trigger and regulate its creation.The return of coercionMGNREGA’s most disruptive impact was not employment numbers. It was bargaining power. By guaranteeing work at a notified wage, it placed a public floor for rural labour markets. Even when work was irregular, the existence of that floor mattered.MGNREGA wage premium in rural areas. Source: MGNREGA MIS reports and MoRD ReportsDuring peak agricultural seasons, when landlords and contractors needed labour urgently, MGNREGA functioned as a credible alternative. If private employers wanted workers, they had to match or exceed the public wage. In many regions, farm wages rose not because employers became generous, but because workers could refuse.Wage growth acceleration post MGNREGA. Source: MGNREGA MIS reports and MoRD ReportsThe VB-G RAM G Act dismantles this leverage with precision. By imposing a mandatory 60-day freezing period during peak agricultural operations, it ensures that public employment disappears exactly when private demand for labour is highest. The consequences are predictable. Without a fallback, workers lose the capacity to negotiate. Piece rates fall. Delays become normalised. What remains are wages that barely sustain life.This is not administrative fine print. It is the return of coercion through monetary design. Labour once again becomes cheap, replaceable, and disciplined by hunger. And money does not disappear in this process. It is simply created elsewhere – reappearing as lower labour costs, higher margins and savings for landlords and contractors. This is a return to the politics of money controlled by markets: the power to decide whose costs are reduced and whose lives are destabilised.Markets, demand and the cost of silencing workersRural wages are not just household incomes. They result into aggregate demand in local markets. India’s economy, despite endless talk of exports and investment-led growth, still rests fundamentally on domestic consumption.MGNREGA acted as a stabiliser in this system. During the 2008 global financial crisis, during droughts and floods, and most starkly during the pandemic, when private employment collapsed across sectors, over 11 crore individuals demanded work under MGNREGA in 2020-21 – the highest since the program’s inception. MGNREGA’s crisis response at the time of COVID-19. Source: MGNREGA MIS reports and MoRD ReportsThis was not inefficiency; it was macroeconomic insurance. It reflected what Karl Polanyi once described as a double movement: when markets fail and livelihoods are threatened, societies seek to re-embed economic activity within institutions of social protection. Money flowed into the economy precisely where markets had failed.The repeal of this act comes at a dangerous moment. Rural indebtedness remains widespread, with over one-third of households carrying debt and an increasing share of borrowing driven by consumption needs rather than productive investment. Recent Reserve Bank of India (RBI) household finance data shows that more than half of household borrowing now takes the form of credit cards, personal loans, and gold loans – borrowing undertaken to make ends meet, not to build future assets. Real wages are stagnant, while food and energy inflation are becoming more volatile as the rupee weakens and import costs rise. In such conditions, compressing rural incomes is not fiscal prudence – it is demand destruction. An economy cannot grow by disciplining those who consume the least and owe the most.Once again, money will still be created but only to absorb losses elsewhere, not to sustain consumption at the base of the economy.Who bears the riskA job guarantee works only when the currency issuer – in this case, the Government of India, as the sovereign issuer of the rupee – accepts responsibility for wages. This was the logic of MGNREGA. While states implemented the program, the Union government met the wage obligation.Even in its significantly limited form, the VB-G RAM G Act breaks this logic. By splitting funding responsibilities while centralising control, it shifts risk downward onto states, which are money users, not money issuers. States are left managing employment without fiscal capacity. As a result, workers are left facing uncertainty without legal recourse.This is not an accident. It fits a broader pattern of eroding fiscal federalism-delayed transfers, shrinking state autonomy, and growing central discretion. Money continues to be created, but the risks attached to its absence are pushed onto those least able to bear them.What is lost in this retreat is not just employment, but a developmental pathway. A genuine job guarantee could have been the backbone of India’s economic sovereignty. Public employment tied to land, water, care, food systems and decentralised energy would have reduced dependence on volatile global markets while anchoring production locally. Instead of importing inflation through food and fuel, India could have built resilience through labour-intensive public work. This was never utopian. It was a choice about whether money would be created to stabilise people and ecosystems, or to manage crises after they arrive.The right to claim moreWhen workers demanded work under MGNREGA, they were not merely asking for employment. They were staking a claim over the economy itself. Decades ago, Faiz Ahmed Faiz wrote something, capturing the spirit of such moments:हम मेहनतकश जग वालों से जब अपना हिस्सा मांगेंगे,इक खेत नहीं, इक देश नहीं, हम सारी दुनिया मांगेंगे।(When we, the working class, will ask for our share from the people of the world,we will demand not just one field, not just one country, but the entire world.)This is what moral economic processes look like. They are not modest; they insist that those who produce value must also shape the terms on which money circulates and social relations are organised.MGNREGA was one such claim and its repeal is an attempt to silence that imagination. And it bears saying plainly: even this program, which now requires such fierce defense, was a minimal concession within a deeply neoliberal framework. Group of workers singing and demanding right to work at a dharna in Rajasthan in 2012-13. Photo: Mazdoor Kisan Shakti Sangathan In the absence of universal healthcare, equitable education, land reform, or wealth taxation, MGNREGA stood as the last thin line of economic protection – one that is now being erased. This speaks volumes about whose security matters in this country.In the dark times, will there be singing?“In the dark times,” asked Bertolt Brecht, “will there be singing?” “Yes, there will also be singing. About the dark times.”When the demand for a job guarantee surged across the country, workers sang together-not because conditions were easy, but because hope was organised. Vinay and Charul’s NREGA anthem captured that spirit:सपनें सजायेंगे, ज़िंदगी बनायेंगे, (We shall cherish our dreams, build our life),उँगलियों को मोड़ के, हाथों को उठायेंगे, (Shall fold the fingers and raise our fists), आसमाँ को छूयेंगे, ज़िन्दाबाद गायेंगे, (Reach to the sky and sing Zindabad) गायेंगे तब तक रे, कि जब तक काम नहीं. . . (Will sing until we get work)लड़ेंगे तब तक रे, कि जब तक काम नहीं। (Will fight until we get work)MGNREGA was more than a scheme – it was about dignity, about rights, about the refusal to accept that scarcity is natural and suffering is inevitable.The singing will continue. Because as long as money is created for some and withheld from others, the struggle over how the economy is designed – and for whom – will not end.Khush Vachhrajani is associated with the Soochna Evam Rozgaar Adhikar Abhiyan (SR Abhiyan).