MGNREGA Under Scanner: Fake Work, Dead Workers and Panchayat-Level Corruption Exposed

A vigilance audit by the Ministry of Rural Development has uncovered widespread irregularities under the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA), exposing systemic corruption that spans multiple states, districts and panchayats. Ground reports from Bihar, Jharkhand, Chhattisgarh, Madhya Pradesh and Uttar Pradesh reveal a disturbing pattern of fake projects, payments to deceased individuals, middlemen-driven siphoning of funds and unpaid labourers.

₹302 Crore Irregularities in Just Eight Months

According to the ministry’s vigilance report, inspections conducted between April and November 2025 across 55 districts in 25 states and Union Territories detected over 11.14 lakh cases of irregularities, involving an estimated ₹302.45 crore.

Officials confirmed that ₹293.43 crore has been recovered, but acknowledged that the audit covers only eight months of the financial year, raising concerns about the true scale of misuse.

The report flags the collusion of officials, contractors, panchayat representatives and bank managers, with many projects existing only on paper.

Fake Work and Contractor Nexus

The audit found that:

• Large works were deliberately split into smaller projects to bypass scrutiny

• Contractors were engaged despite explicit prohibitions

• Labourers aged 80 years and above were falsely shown as active workers

• Procurement files lacked GST and royalty documents

• Repeated payments were made to the same vendors using identical tenders

In several locations, roads, ponds and embankments were shown as completed in records but did not exist on the ground.

Payments in the Names of the Dead

One of the most serious findings relates to payments made using fake and duplicate job cards, including wages credited to deceased individuals.

In Madhya Pradesh’s Jhabua district, complainants produced death certificates proving that beneficiaries had died years earlier, yet wages were shown as paid in their names. The matter eventually reached the High Court, which ordered a probe by the Lokayukta Police.

Bihar: Panchayat-Level Scams Worth Crores

In Bhagalpur’s Saino Panchayat, a scam of nearly ₹20 crore was unearthed. No canal work, pond renovation or land development took place, but funds were withdrawn using fake vendors and forged records.

The panchayat employment officer was dismissed after investigators found assets purchased in the names of family members, including land parcels at multiple locations.

In Munger, farmers alleged that canal cleaning was shown three times on paper while their crops were destroyed by flooding due to clogged waterways.

Jharkhand: Middlemen Hijack Goat Shed Scheme

In Sahibganj district, beneficiaries under the MGNREGA goat shed scheme alleged that middlemen demanded bribes of ₹3,000 per person. Many sheds remained incomplete, while full payments were withdrawn using photographs taken with incorrect beneficiary nameboards.

District authorities have ordered an inquiry.

Chhattisgarh: Job Cards Without Jobs

In Manendragarh-Chirmiri-Bharatpur district, villagers reported holding valid job cards but receiving no work for two years, nor unemployment allowance. Women and elderly residents said survival had become increasingly difficult amid rising prices and lack of income.

Uttar Pradesh: Work Exists Only on Paper

A ground check in Maharajganj district revealed over 100 labourers listed across 13 muster rolls, but no workers present at the site. Panchayat representatives offered conflicting explanations, while officials promised an inquiry.

Why the System Failed

The audit highlighted severe governance gaps:

• Poor record-keeping at panchayat level

• Field staff forced to maintain 22–29 registers, enabling manipulation

• Lack of geo-tagging and photographic evidence in earlier years

• Delayed Aadhaar seeding and weak beneficiary verification

Till 2014, only 76 lakh workers had Aadhaar-linked records despite crores being registered.

Post-2014 Reforms and Government Stand

After 2014, the Centre introduced geo-tagging of assets, Aadhaar seeding, and 100% direct bank payments through electronic systems.

Union minister Shivraj Singh Chouhan stated that MGNREGA was plagued by corruption such as machine usage, contractor dominance and fake job cards, prompting reforms and the rollout of Viksit Bharat G RAM G, which increased guaranteed workdays from 100 to 125.

However, ground reports indicate that implementation gaps remain, particularly at the panchayat level.

A Scheme at Crossroads

MGNREGA was designed as a lifeline for rural employment and asset creation. The latest findings suggest that while technological reforms have reduced leakages at higher levels, localised corruption continues to undermine the scheme’s purpose, denying genuine workers their rightful wages.

Whether ongoing probes and systemic reforms can restore credibility to India’s largest rural employment programme remains an open question.