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 flagship rural welfare schemes, the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) and Pradhan Mantri Awaas Yojana-Gramin (PMAY-G), can be revived in the state, senior officials in the ministry said.
The discussions started on Tuesday, they added, asking not to be named -- the Bharatiya Janata Party won assembly elections in the state, results of which were declared on Monday. Once formalised, the restart is expected to unlock over ₹3,082.52 crore in frozen MGNREGS liabilities for the state, in addition to pending PMAY-G dues of ₹4,900 crore.
Union Rural Development Minister Shivraj Singh Chouhan said that the resumption of the schemes was imminent. “Now all developmental will be done at a fast pace. The funds were stopped because the state government had occured irregularities — the state government took no action against those responsible. The funds were intended for the poor, not for misuse. They changed the name of the scheme to Bangla Awas Yojana. Now under the BJP government, these schemes will be resumed and 50 to 80 lakh families who had no work under NREGS will benefit,” Chouhan said, adding that the rules and guidelines for both schemes have been finalised and would be rolled out very soon.
West Bengal was among the biggest beneficiaries of MGNREGS — a scheme that guarantees employment for rural households . In 2020-21, the state received ₹9,397.68 crore under the wage component of the scheme, making it the single largest recipient nationally, ahead of Rajasthan ( ₹8,097.76 crore) and Uttar Pradesh ( ₹7,817.58 crore). The following year, 2021-22, it received ₹5,645.91 crore. Millions of rural workers in the state depended on the scheme for daily livelihood.
{{/usCountry}}West Bengal was among the biggest beneficiaries of MGNREGS — a scheme that guarantees employment for rural households . In 2020-21, the state received ₹9,397.68 crore under the wage component of the scheme, making it the single largest recipient nationally, ahead of Rajasthan ( ₹8,097.76 crore) and Uttar Pradesh ( ₹7,817.58 crore). The following year, 2021-22, it received ₹5,645.91 crore. Millions of rural workers in the state depended on the scheme for daily livelihood.
{{/usCountry}}Then in March 2022, everything stopped. The Union government froze all funds to West Bengal effective March 9, 2022, invoking Section 27 of MGNREGA, 2005 — a provision that allows the Centre to withhold funds for non-compliance. The Centre alleged large-scale corruption in the scheme’s implementation : fake job cards, bogus beneficiaries, and repeated refusal to follow Central directives on how the scheme must be run. According to official data, the total pending liability as on March 8, 2022 — money that had been committed but not paid — stood at ₹3,082.52 crore, comprising ₹1,457.22 crore in unpaid wages to workers, ₹1,607.68 crore under the material component, and ₹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 respective shares after the freeze.
Under PMAY-G — a scheme that provides financial assistance to rural households for constructing a pucca (proper) house — the Centre halted funding for West Bengal from November 2022 after Central inspection teams allegedly discovered implementation irregularities. The immediate trigger was the TMC government renaming the scheme Bangla Awas Yojana, violating Central guidelines that mandated the prime minister’s name and image on houses built under the programme. Allegations of selecting ineligible beneficiaries compounded the dispute. West Bengal’s proposal for the release of ₹4,900 crore under PMAY-G went nowhere. The cost-sharing ratio between the Centre and the state is 60:40 ; of the ₹4,900 crore proposed, the Central share was ₹2,940 crore and the state share at ₹1,960 crore; neither amount was released. The pause affected the clearance of over 4 million housing applications across 23 districts.
As per the proposal discussed on Tuesday, the ministry is considering sharing a structured repayment framework with the new state government. The officials cited above said the idea is to ask the state to “ clear its share of pending dues in the next state budget or in phased instalments if a one-time settlement is not feasible”. They added that the new state government will also be required to restore the original names of both schemes — PMAY-G dropping the state-renamed versions, as a precondition before any funds are released. Once a formal restart order is issued, the ministry will route funds directly to West Bengal’s state Rural Development department, which will then disburse them to districts and beneficiaries.
The Centre took an earlier step toward normalisation in December 2025 by issuing an order approving the resumption of MGNREGS in West Bengal subject to mandatory compliance and certain conditions. However, as per a Parliament reply dated February 2, the state did not submit the required labour budget for 2025-26 within the stipulated 30-day window.
The three-year standoff between the then TMC government and the Centre left millions of rural workers and housing beneficiaries in West Bengal without access to Central entitlements. That may now change.