In a landmark ruling, the Calcutta High Court has mandated the resumption of the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) scheme in West Bengal, effective from August 1, 2025. This decision delivers a significant blow to the Mamata Banerjee-led Trinamool Congress (TMC) government, marking a major victory in the ongoing battle against corruption. The verdict underscores the judiciary’s commitment to ensuring that the benefits of the scheme reach the poor, while curbing systemic misuse.
The order was passed by a Division Bench comprising Chief Justice T.S. Sivagnanam and Justice Chaitali Chatterjee (Das) during the hearing of a public interest litigation filed by Paschim Banga Khet Mazdoor Samity [WPA(P)/237/2023] against the Union of India and others. The petition highlighted the prolonged non-payment of wages to daily wage labourers under the 100-day employment guarantee scheme.
“Implement the Scheme, Proceed with the Inquiry”
During the hearing, Chief Justice Sivagnanam made a strong oral observation:
“All these allegations are from before 2022. You do whatever you want, but implement the scheme.”
The court acknowledged the Central Government’s concerns over financial irregularities and fund misappropriation in the MGNREGA programme in West Bengal prior to 2022. It noted that in response to these allegations, funds were recovered and placed in a nodal account of the state government, which must now be remitted to the Consolidated Fund of India.
However, the bench clarified that the existence of alleged past corruption cannot justify depriving lakhs of rural households of their constitutional right to employment under the Act.
“The scheme of the Act does not envisage a situation where it would be put in cold storage for eternity. The Central Government has sufficient means to enquire into the irregularities in the disbursement of wages. However, there can be a line drawn between past actions and future steps,” the Bench stated.
It emphasised that such an approach would uphold public interest and honour the spirit in which the employment guarantee law was enacted.
The court asked the Central Government to resume implementation of the MGNREGA scheme from August 1, 2025, and allowed both the Centre and the State to impose special conditions on fund disbursement to ensure that misappropriations of the past are not repeated.
The court’s ruling addresses critical issues surrounding the scheme’s mismanagement in the state. It explicitly states that the MGNREGA program cannot be suspended indefinitely merely due to misuse by the state government. To prevent further irregularities, control of the scheme will now be transferred to the Central Government, which will enforce strict monitoring mechanisms. This shift effectively curtails the state government’s ability to exploit the program for political or financial gain, a practice that has been a point of contention.
“The endeavour of the court is to ensure that the scheme is implemented and that those who illegally obtained funds are dealt with in accordance with law,” the judgment noted.
Furthermore, the court has ruled out retrospective payments, ensuring that only genuine beneficiaries will receive fresh entitlements under the restarted scheme. This measure aims to safeguard the program’s integrity and direct resources to those who truly need them.
Additionally, all funds recovered from the MGNREGA scam in West Bengal will be deposited into the Consolidated Fund of India, preventing any siphoning of resources back to the state’s ruling party.
While ordering resumption, the court made it clear that the Centre is free to continue its probe into past irregularities and take action against those found responsible.
The petitioners, represented by Advocates Purbayan Chakraborty and Kuntal Banerjee, had argued that the indefinite freeze of MGNREGA payments had severely impacted rural livelihoods in West Bengal. They claimed that the Centre’s decision to withhold funds since 2022 had no legal justification under the Act and violated the spirit of a welfare law aimed at ensuring livelihood security.
The Centre, on the other hand, had alleged rampant corruption in wage disbursement and demanded corrective measures and accountability before resuming the scheme.
This verdict serves as a sharp rebuke to the TMC’s corruption-ridden governance, which has faced widespread criticism for mismanaging welfare programs. The ruling not only restores hope for the poor in Bengal, who will now have access to their rightful entitlements, but also sets a precedent for accountability in public welfare schemes.
