Viksit Bharat – G RAM G Act to Replace MGNREGA from July 1

The Indian government has officially announced and notified the implementation of the Viksit Bharat – Guarantee for Rozgar and Ajeevika Mission (Gramin) (VB-G RAM G) Act, 2025, which is set to come into force across all rural areas of the country from July 1, 2026. This significant legislative change will repeal the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) of 2005, marking a major overhaul in India's rural employment and development policy after two decades. The Ministry of Rural Development issued notifications confirming this transition, describing it as a 'historic transition' aligned with the government's long-term development vision of 'Viksit Bharat @2047'. Under the new VB-G RAM G Act, the statutory guarantee of wage employment for rural households will be enhanced from 100 days to 125 days in a financial year for adult members who volunteer for unskilled manual work. This increase aims to provide greater income security and support accelerated rural development. The Act is designed to integrate employment generation with the creation of durable rural infrastructure across four priority areas: water security, core rural infrastructure, livelihood-related infrastructure, and climate resilience. This marks a shift from MGNREGA's broader scope to a more focused approach on asset creation and sustainable development. One notable feature of the VB-G RAM G Act is the provision for states to notify a 'pause period' aggregating up to 60 days in a financial year. This period is intended to facilitate the availability of agricultural labor during peak sowing and harvesting seasons, addressing a long-standing concern about the impact of employment guarantee schemes on agricultural activities. The new legislation also introduces a revised funding pattern. The scheme will operate as a centrally sponsored scheme, with a fund-sharing ratio of 60:40 between the Centre and states for most regions. However, for North Eastern states, Himalayan states, and Union Territories, the Centre will provide enhanced support with a 90:10 sharing pattern. This differs from MGNREGA's funding structure, where states bore a lower share of material and administrative costs, and is expected to improve predictability and accountability in Centre-State partnerships. To ensure a smooth transition, the Ministry of Rural Development has assured that existing e-KYC verified MGNREGA job cards will remain valid until new 'Gramin Rozgar Guarantee Cards' are issued. Furthermore, all ongoing works under MGNREGA as of June 30, 2026, will be seamlessly saved and carried over into the new framework. Workers will not be denied employment due to pending e-KYC, and registration for those without job cards will continue at the Gram Panchayat level. The Act also places a strong emphasis on timely, transparent, and accountable wage payments, with provisions for an unemployment allowance if work is not provided within the stipulated timeframe, and compensation for delays in wage payments. Beyond direct employment, the VB-G RAM G Act aims to strengthen decentralized planning through 'Viksit Gram Panchayat Plans' and integrate these nationally through the 'Viksit Bharat National Rural Infrastructure Stack'. This framework seeks to empower Panchayati Raj Institutions in planning and execution, with Gram Panchayats responsible for implementing at least half of the works in terms of cost. An important social inclusion aspect is the incorporation of childcare support at worksites, where a woman worker will be appointed to care for children if five or more children below the age of five are present, encouraging greater participation of women workers. While the government highlights the benefits of the new Act, including enhanced income security, improved rural infrastructure, and a more integrated development model, there has been some criticism. Opposition parties, as reported by outlets like TheWire.in and Daily Pioneer, have voiced concerns that the replacement of MGNREGA might dilute the 'right to work' and centralize power with the Union government. Some critics argue that the new Act, despite increasing guaranteed days, might restructure the rights-based architecture of MGNREGA, impacting aspects like wage determination, financial allocations, and the geographical scope of the scheme's applicability. However, government statements emphasize continuity and improvement, promising seamless transition and strengthened accountability. Overall, the VB-G RAM G Act represents a significant policy shift intended to modernize India's rural employment landscape, aligning it with broader national development goals while aiming to address previous shortcomings in implementation and outcomes of MGNREGA.

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