MNREGA to Be Replaced by VB–G RAM G Act 2025
The Government of India has proposed a major overhaul of the rural employment framework through the introduction of the Viksit Bharat—Guarantee for Rozgar and Ajeevika Mission (Gramin) (VB—G RAM G) Act, 2025. This new legislation is set to replace the landmark Mahatma Gandhi National Rural Employment Guarantee Act (MNREGA), 2005. While the new act retains much of MNREGA’s structure and language, a closer examination reveals significant changes in funding responsibility, planning authority, and the nature of the employment guarantee itself.
One of the most noticeable changes under the proposed Act is the increase in guaranteed wage employment from 100 days to 125 days per household per year. At first glance, this seems to enhance rural livelihood security. However, this increase comes with a critical limitation—a mandatory suspension of work for 60 days during the sowing and harvesting seasons. Unlike MNREGA, which did not impose such stoppages, this provision introduces breaks in employment continuity, potentially undermining the core idea of a guaranteed, on-demand work program.
A more significant transformation is found in the funding pattern. Under MNREGA, the central government funded 100% of the wage costs for unskilled labor, ensuring the credibility of the employment guarantee. It also covered 75% of the material, skilled labor, machine costs, and administrative expenses. The VB—G RAM G proposal alters this structure, reducing the Centre’s contribution to 60% of the total fund requirement, while states are expected to finance the remaining 40%. This shift raises concerns about the ability of fiscally weaker states to sustain rural employment at the same scale.
Further, fund allocation will now be based on “normative allocation” and “objective parameters” determined by the central government. This marks a departure from MNREGA’s demand-driven approach, where employment generation responded directly to local needs. By centralizing fund determination and reducing the central financial contribution, the scheme risks moving away from a rights-based guarantee towards a controlled, target-based model.
The scope of coverage under the new Act also appears uncertain. While MNREGA applied universally across rural India, the VB—G RAM G Act specifies that it will only apply to rural areas designated by the central government. This raises important questions about federalism and social security. If certain rural regions are excluded from notification, the responsibility for employment generation may fall entirely on state governments, potentially widening regional inequalities.
Additionally, planning mechanisms are undergoing significant changes. MNREGA relied on a bottom-up Labour Budget, which was prepared by villagers and approved by the Gram Sabha. In contrast, the proposed Act introduces Viksit Gram Panchayat Plans (VGPP), which are prepared at the block and district levels and aligned with the Viksit Bharat National Rural Infrastructure Stack (VBRIS) and the PM Gati Shakti National Master Plan. While community participation is mentioned, local inputs may be aggregated rather than directly accepted, reducing grassroots decision-making power.
The thematic focus of projects under the new framework leans heavily towards infrastructure development, including the construction of panchayat buildings, schools, hospitals, and canals. These projects typically require higher amounts of material, machine, and skilled labor inputs, which could reduce opportunities for unskilled rural workers, who were the original beneficiaries of MNREGA.
Another critical aspect is the expanded use of digital technology, such as mandatory digital attendance and geo-tagging. While these measures aim to enhance transparency and efficiency, they pose challenges in regions with weak digital connectivity. Past experiences suggest that such constraints can lead to the exclusion of remote and marginalized areas from employment opportunities.
Overall, the VB—G RAM G Act, 2025, represents a significant evolution in India’s rural employment policy. While it promises increased workdays and technological empowerment, it also dilutes central financial responsibility, restricts work availability, and centralizes planning. This shift indicates a move from a community-driven social security framework towards an infrastructure-focused, nationally aligned development model—a change that continues to spark debate among policymakers and rural development experts.
