The Indian government has amended Schedule I of the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) to prioritize water conservation projects in water-stressed rural areas.
The recent amendment, implemented through a notification issued on September 24, 2025, mandates that a specific percentage of MGNREGA funds must be used for water-related works based on the groundwater assessment of each rural block. 

Background

Schedule I of the MGNREGA lists the types of work that are permissible under the rural employment scheme. The amendment introduces new rules for how funds are allocated to shift the program's focus from reactive drought relief to proactive, long-term water management. 

Key provisions of the amendment

The amended Paragraph 4(2) of Schedule I imposes new mandatory spending requirements for rural blocks, which are classified based on the latest Dynamic Ground Water Resources Assessment by the Central Ground Water Board (CGWB). 

The new allocation rules for water conservation and harvesting works are: 

• Over-exploited and Critical blocks: At least 65% of the total expenditure must be allocated to water conservation.
• Semi-critical blocks: At least 40% of the total expenditure must be dedicated to water conservation.
• Safe/Non-critical blocks: At least 30% of the total expenditure must be used for water conservation. 

Changes to fund allocation

This revision shifts the balance of power in planning projects. 

• Previous provision: Gram Panchayats previously had the authority to prioritize works based on local needs, though a minimum of 60% of the funds had to be for agriculture and allied activities, including water.

• Amended provision: The new rule supersedes this prioritization by the Gram Panchayat, mandating a specific, non-negotiable share of funds for water-related works based on a block's groundwater status. 

Rationale and implications

• Policy shift: The amendment represents a significant policy shift aimed at boosting groundwater levels and accelerating water conservation efforts across the country.
• Resource allocation: It ensures that resources are directed to areas most in need of water management, moving from a reactive approach to a preventative one.
• Coordination and implementation: To facilitate this, the MGNREGA has been working in convergence with the CGWB to use technical knowledge for planning and implementing water conservation schemes.

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