Copyright infringement not intended

Picture Courtesy: The Hindu

Context:

On December 18, 2025, Parliament passed the Viksit Bharat Guarantee for Rozgar and Ajeevika Mission (Gramin) Bill (VB-G RAM G) to replace the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA), 2005.

Current Status of MGNREGA:

• The legal right to demand 100 days of rural employment no longer exists, as MGNREGA is no longer a statutory entitlement.
• Before repeal, around 12.6 crore active workers depended on MGNREGA for livelihood security across rural India.
• Women constituted nearly 58% of the workforce, making it one of the most gender-inclusive public employment programmes in the world.
• Scheduled Castes and Scheduled Tribes formed about 35% of total workers, highlighting its role in supporting vulnerable communities.
• The scheme operated on a universal and demand-driven basis, without BPL targeting or social category restrictions.
• MGNREGA wages in 2025–26 ranged from ₹241 to ₹400 per day, varying across States.
• It acted as a critical social safety net during crises, especially during the COVID-19 pandemic and agricultural lean seasons.

Evolution of MGNREGA:

Importance of MGNREGA:

Social safety net for rural poor: MGNREGA acted as a guaranteed fallback source of income during agricultural lean seasons and economic distress, supporting around 12.6 crore active workers across rural India.

Poverty reduction and consumption stabilisation: By providing assured wage employment, MGNREGA helped smooth household consumption, with studies showing up to a 30% increase in lean-season consumption among Scheduled Caste and Scheduled Tribe households. 

Women’s economic empowerment: The scheme significantly enhanced female labour force participation and financial autonomy, with women constituting nearly 58% of total MGNREGA workers, one of the highest shares globally in public employment programmes. 

Social inclusion of marginalised communities: MGNREGA’s universal and non-discriminatory design ensured access for vulnerable groups, with SCs and STs accounting for about 35% of total beneficiaries, particularly in tribal and backward regions. 

Reduction in distress migration: By providing employment within villages, MGNREGA reduced seasonal and distress migration, as evidenced in regions such as eastern Uttar Pradesh and Bundelkhand, where workers avoided migration to urban informal sectors. 

Shock absorber during economic crises: MGNREGA functioned as an automatic stabiliser during crises, generating a record 389 crore person-days in 2020–21 to absorb reverse migration and rural distress during the COVID-19 pandemic. 

Creation of durable rural assets: Beyond wage employment, the programme contributed to long-term rural development by creating assets in water conservation, land development, and drought-proofing, accounting for over 70% of total works. 

Rationale behind the introduction of the new rural employment bill:

• Addressing alleged corruption and leakages: The government cited persistent cases of fake job cards, inflated muster rolls, and fund diversion under MGNREGA, with CAG audits and state-level vigilance reports highlighting irregularities in multiple districts, prompting the need for stricter central oversight. 

• Ensuring fiscal sustainability: MGNREGA expenditure expanded sharply during crises, reaching over ₹1.1 lakh crore in 2020–21, and remaining above ₹60,000–70,000 crore annually, leading the government to argue that a budget-capped, supply-driven model would ensure long-term fiscal predictability.
• Correcting administrative inefficiencies: Despite digital monitoring, wage payment delays affected nearly 20–25% of transactions in some years, undermining worker trust and efficiency, which the government believes can be addressed through centrally standardised norms and tighter fund-flow controls. 

• Managing rural labour market distortions: State governments and farm bodies reported seasonal farm labour shortages in states like Punjab and Haryana, where MGNREGA wages allegedly competed with peak agricultural operations, leading to the provision of blackout periods in the new Bill. 

• Improving targeting and resource allocation: The government argued that universal coverage diluted impact, as several relatively better-off districts continued to draw funds, and that geographically notified implementation would focus resources on high-unemployment regions such as tribal and aspirational districts. 

• Strengthening state accountability through cost sharing: Under MGNREGA, the Centre effectively bore around 90% of total costs, which the government claimed reduced state ownership, and the new 60:40 cost-sharing formula is intended to incentivise closer monitoring by states. 

• Aligning employment with productive asset creation: Internal reviews showed that while asset creation was mandated, work selection often prioritised short-term employment over productivity, and the new framework seeks to better integrate employment with infrastructure, irrigation, and livelihood-linked projects. 

Difference Between MGNREGA and the New Rural Employment Bill (VB-G RAM G):

Limitations of the VB-G RAM G (Viksit Bharat Guarantee for Rozgar and Ajeevika Mission – Gramin):

Dilution of the Right to Work: VB-G RAM G replaces the legally enforceable right to employment under MGNREGA with a discretionary, scheme-based approach, weakening citizens’ ability to demand work as an entitlement.

Shift from Demand-Driven to Supply-Driven Framework: By making employment contingent on centrally determined allocations, the new Bill reduces responsiveness to local unemployment and seasonal distress.

Loss of Universality and Risk of Exclusion: The provision allowing the Centre to notify specific rural areas may exclude needy households in non-notified regions, increasing regional and social inequities.

Increased Financial Burden on States: The revised 60:40 cost-sharing pattern places significant fiscal pressure on states, particularly poorer states with limited revenue capacity.

Centralisation at the Cost of Federalism: Greater control of the Centre over funding, coverage, and parameters undermines cooperative federalism and reduces state and Panchayat autonomy.

Gender Impact: Women, who formed nearly 58% of MGNREGA workers, may be disproportionately affected if work availability becomes irregular or distant from habitations.

Measures to strengthen rural growth and employment in India:

Strengthening rural employment safety nets: Rural employment can be stabilised by ensuring adequate funding, timely wage payments, and effective implementation of employment programmes such as MGNREGA/VB-G RAM G, especially during agricultural lean seasons and economic shocks.

Enhancing agricultural productivity and farm incomes: Investments under PM Krishi Sinchai Yojana (PMKSY), Soil Health Card Scheme, and National Mission on Sustainable Agriculture (NMSA) can raise productivity, improve water-use efficiency, and create on-farm employment.

Promoting allied and livestock-based livelihoods: Schemes such as National Livestock Mission, Animal Husbandry Infrastructure Development Fund (AHIDF), and Pradhan Mantri Matsya Sampada Yojana (PMMSY) support dairy, fisheries, and poultry, generating year-round rural jobs.

Expanding rural non-farm employment and MSMEs: Initiatives like PM Formalisation of Micro Food Processing Enterprises (PMFME), SFURTI, and MUDRA Yojana encourage rural entrepreneurship and local manufacturing.

Skill development aligned to rural needs: Programmes such as Deen Dayal Upadhyaya Grameen Kaushalya Yojana (DDU-GKY) and Pradhan Mantri Kaushal Vikas Yojana (PMKVY) improve employability of rural youth in agriculture, construction, logistics, and services.

Strengthening rural infrastructure: Large-scale investments under PM Gram Sadak Yojana (PMGSY), BharatNet, Saubhagya, and Jal Jeevan Mission enhance connectivity, digital access, power supply, and water availability, stimulating rural economic activity.

Leveraging green and digital rural jobs: Initiatives like the National Bio-Energy Mission, Solar Pumps under PM-KUSUM, and Digital India create employment in renewable energy, maintenance, and digital service delivery.

Conclusion:

The replacement of MGNREGA with the VB-G RAM G framework marks a significant shift in India’s rural employment policy from a rights-based, demand-driven approach to a centrally planned, fiscally constrained model. While the government aims to improve efficiency, accountability, and alignment with the Viksit Bharat vision, concerns remain regarding dilution of universality, increased burden on states, and potential exclusion of vulnerable rural households. The long-term success of the new framework will depend on balancing fiscal discipline with livelihood security, federal cooperation, and grassroots responsiveness.

Source: The Hindu