Parliament has replaced India’s 20-year-old rural jobs guarantee with a new law, known as VB-G RAM G. Guaranteed work rises to 125 days, but states must now share the cost, and the programme can pause during peak farming season.
For twenty years, the Mahatma Gandhi National Rural Employment Guarantee Act, better known as MGNREGA, promised every rural household up to 100 days of paid manual work a year, on demand. It became one of the largest public employment programmes in the world and a lifeline during droughts and the pandemic. This month Parliament replaced it with the Viksit Bharat Guarantee for Rozgar and Ajeevika Mission (Gramin) Act, shortened to VB-G RAM G. The new law promises more days of work, but it changes who pays for them and when they are offered.
What changes
- Guaranteed work rises from 100 to 125 days per household per year.
- Costs are shared 60:40 between the Centre and states, rather than the Centre covering all wages. Northeastern and Himalayan states get a 90:10 split.
- States can suspend work for up to 60 days a year during peak sowing and harvest, so that the scheme does not compete with farms for labour.
- Funding moves toward fixed allocations rather than being purely driven by how many people ask for work.
The argument
Supporters say the old scheme had become a leaky, low-productivity programme and that tying it to farming seasons and asset creation will make it more useful. They argue that a 25% increase in guaranteed days is a genuine expansion of the safety net.
Critics focus on the money. Under MGNREGA, if a worker demanded work, the Centre paid the wages, so poorer states could offer work without worrying about their own budgets. Under the new sharing formula, a state with weak finances must find 40% of the cost itself. That shifts the burden in ways economists call fiscal federalism, and it may mean the states with the most need for work can afford the least. The opposition also objected strongly to removing Mahatma Gandhi’s name from the law.
A guarantee is only as strong as the budget behind it.
The real test is in the villages. If states fund their share and the extra days materialise, rural workers gain. If budgets fall short, a promise of 125 days could deliver fewer in practice than the old promise of 100.
Sources: Viksit Bharat Guarantee for Rozgar and Ajeevika Mission (Gramin) Act, 2025; parliamentary debates.
- The new law guarantees up to 125 days of work per rural household, up from 100.
- The Centre and states now share costs 60:40, instead of the Centre paying all wages.
- States can pause work for up to 60 days during peak sowing and harvest.
- Critics worry that poorer states may struggle to fund their share, limiting how much work is actually offered.
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