Changes in employment guarantee scheme will severely impact states: Kerala FM
GST
Dated:- 18-12-2025
PTI
Kochi, Dec 18 (PTI) Kerala Finance Minister K N Balagopal on Thursday said changes brought to the employment guarantee scheme would severely impact states.
Speaking to reporters here in the wake of the G RAM G Bill introduced by the Centre in Parliament to replace the MGNREGA scheme, Balagopal said converting the employment guarantee scheme to a 60:40 funding ratio would adversely affect states and limit employment generation under the scheme.
“The union government is backtracking from its responsibilities under the Centre–state relationship. Last year, Rs 80,000 crore was earmarked for states. The reasonable share due to t
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ne would suffer a financial loss of Rs 8,000 crore to Rs 10,000 crore annually due to tax reforms.
“Recent figures show that the study was right,” he said.
“After the new rate, for the first time, states in India have witnessed negative growth. KeralaÂ’s situation is relatively better, but the growth rate in the state will also decline,” he said.
He said automobile sales rose by 65 per cent in several states following the rate revision during the festive season, but questioned the sustainability of such consumption.
“Will we buy a car every month? Nobody buys a car even every year,” he said.
Balagopal said although the rate revision was intended to boost consumption, prices of goods have not come down, as per studies.
“In the end, tax
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uarantee scheme enhanced incomes in rural areas, but fund cuts would reduce state revenues by at least Rs 2,000 crore per year, he said, adding that earlier 90 per cent of the scheme was funded by the Centre, but that has now changed.
In Kerala alone, 9.07 crore employment days were generated last year, involving 13.72 lakh families, while around 22 lakh people have enrolled under the scheme, he said.
Balagopal said the recent developments would put the Indian economy and the lives of common people across the country under stress.
“It will have far-reaching consequences, pushing both states and the Centre into trouble,” he said.
Lok Sabha on Thursday passed a bill to replace the 20-year-old scheme MGNREGA amid tearing of papers by oppos
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