VB-GRAMG Act Replaces MGNREGA from 1 July 2026

MGNREGA was enacted in 2005 as the world’s largest public works programme. It provided a legal guarantee of at least 100 days of wage employment per financial year to every rural household, treating employment as a justiciable right — the government was legally bound to provide work within 15 days of application, or pay an unemployment allowance.

At its peak during COVID-19 in 2020–21, MGNREGA provided employment to approximately 7.6 crore rural households. In southern states like Karnataka, Kerala, and Tamil Nadu, over 80% of MGNREGA workers were women. However, by 2025–26, the number had fallen to just 6.37 crore — the lowest since the pandemic.

Persistent structural problems included: chronic wage payment delays beyond the 15-day window, widespread muster roll fraud, massive project incompletion (only 98 lakh of 296 lakh sanctioned works completed in one assessment period), and non-payment of unemployment allowances — providing the legislative rationale for VB-GRAMG.

1. Expanded Employment Guarantee (125 Days): The annual statutory entitlement rises from 100 to 125 days per rural household — a 25% increase. Under MGNREGA, 100 days had effectively become a ceiling; additional employment was only available in drought/disaster areas or specific tribal regions.

2. Weekly Wage Disbursement: Wages will now be paid weekly, a major improvement over MGNREGA’s 15-day mandated cycle, which was routinely breached with delays stretching months in areas with weak banking infrastructure.

3. Seasonal Agricultural Pause: Sections 6(1) and 6(2) allow state governments to suspend public works for up to 60 days per year during peak sowing and harvesting seasons. While intended to ensure agricultural labour availability, critics note this reduces the window for workers to realise the 125-day guarantee.

4. Technology Integration: Mandates AI-based fraud detection, GPS monitoring, biometric/Aadhaar-linked payments, and digital attendance. Social audits will be conducted twice a year (up from annual under MGNREGA). Administrative expenditure ceiling raised from 6% to 9%.

5. Infrastructure Alignment: All works must originate from Viksit Gram Panchayat Plans, aggregated into the Viksit Bharat National Rural Infrastructure Stack, aligning rural employment with national priorities under PM Gati Shakti. Priority areas: water security, rural roads, livelihood infrastructure, and climate mitigation.

6. New Job Card: Existing e-KYC verified MGNREGA job cards remain valid during transition; new Gramin Rozgar Guarantee Cards will be issued under VB-GRAMG.

Under MGNREGA, the Central Government bore 100% of unskilled wage costs — states contributed nothing to worker wages. VB-GRAMG converts this into a Centrally Sponsored Scheme with shared financing:

• 60:40 (Centre:State) for general category states
• 90:10 (Centre:State) for North Eastern states, Himalayan states (Himachal Pradesh, Uttarakhand), and UTs with legislature (including J&K)

Beyond the funding ratio, Sections 4(5) and 4(6) replace MGNREGA’s demand-driven Labour Budget with state-wise normative allocations. The Centre determines allocations at the start of each financial year based on “objective parameters.” Any expenditure beyond this cap must be borne entirely by the state government.

Critics argue this converts a rights-based, demand-driven entitlement into a budget-capped, supply-driven programme — especially damaging during droughts or economic downturns when demand spikes beyond the normative ceiling.

The VB-GRAMG Bill passed amid considerable political controversy. The Rajya Sabha cleared it in the early hours of 19 December 2025 after a heated overnight debate.

Opposition objections: The removal of “Mahatma Gandhi” from the Act’s name drew strong protests from the Congress party, who staged demonstrations inside Parliament. Congress leader Jairam Ramesh stated the “fundamental character of MGNREGA has been changed” and called the legislation an attack on rural livelihood rights. The shift to normative allocations was the structural centrepiece of criticism — the argument being that capping funds destroys the justiciable nature of the guarantee.

Government defence: Union Agriculture Minister Shivraj Singh Chouhan emphasised that delayed wages would attract additional compensation under the new Act. Union Minister Pralhad Joshi called it “the most progressive bill,” arguing it brings transparency, improves rural infrastructure, and helps reverse rural-to-urban migration.

Expert view: Former NITI Aayog CEO Amitabh Kant endorsed the law, arguing MGNREGA was designed for “a very different rural economy in 2005.” Independent economists and civil society groups, however, have focused on the normative allocation cap as the key structural risk.

MGNREGA was landmark social legislation because it converted a welfare benefit into a legally enforceable, justiciable entitlement. Workers could approach courts if work was denied or unemployment allowances were withheld.

Critics of VB-GRAMG argue the normative allocation cap effectively converts this justiciable right into a schematic entitlement: if the allocated budget runs out, work can be denied without constitutional remedy for the worker, undermining the Act’s foundational premise.

The government maintains that the legal guarantee of 125 days remains fully intact and that normative allocations will be set at levels sufficient to meet demand. The actual test will come from how “objective parameters” for allocations are notified — these rules had not been published as of the official transition notification in May 2026.