NEW DELHI: Centre is set to introduce a new rural employment law in the Lok Sabha, proposing to repeal the two-decade-old Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) with another legislation, titled the Viksit Bharat Guarantee for Rozgar and Ajeevika Mission (Gramin) (VB–G RAM G) Bill, 2025.The bill seeks to replace the MGNREGA with a revamped framework aimed at aligning rural employment and development with the national vision of Viksit Bharat 2047. It has been listed in the supplementary list of businesses issued on Monday.
Here are some of the frequently asked questions:
What is VB–G RAM G?
The Viksit Bharat Guarantee for Rozgar and Ajeevika Mission (Gramin) Act, 2025 represents a major overhaul of MNREGA. Under the proposed law, the government “establishes a modern statutory framework aligned with Viksit Bharat 2047, guaranteeing 125 days of wage employment per rural household whose adult members volunteer to do unskilled manual work,” as per a statement released.The Act aims to create both employment and durable rural infrastructure through four priority verticals:
- Water security through water-related works
- Core-rural infrastructure
- Livelihood-related infrastructure
- Special works to mitigate extreme weather events
All assets created under the scheme will be consolidated into the Viksit Bharat National Rural Infrastructure Stack, aimed at “ensuring a unified and coordinated national approach to rural development,” it said.
How is the new act different from MGNREGA? What makes it better?
The new Act represents a major upgrade over MGNREGA, fixing structural weaknesses while enhancing employment, transparency, planning, and accountability. Key improvements include:
- Higher Employment Guarantee: Guarantee increases from 100 → 125 days, giving rural households higher income security.
- Strategic Infrastructure Focus: MGNREGA works were scattered across many categories without a robust national strategy.
- Localised, Spatially Integrated Planning: The new Act mandates Viksit Gram Panchayat Plans, prepared by panchayats themselves and integrated with national spatial systems like PM Gati-Shakti.
- The new Act focuses on 4 major types of works ensuring durable assets that directly support water security, core rural infrastructure, livelihood-related infrastructure creation and climate adaptation
How will the new scheme benefit the rural economy?
The Act strengthens the rural economy through productive asset creation, higher incomes, and better resilience:
- Water Security: Water-related works are prioritised. Mission Amrit Sarovar has already created/rejuvenated 68,000+ water bodies, demonstrating clear agricultural and groundwater impact.
- Core Rural Infrastructure: Roads, connectivity and foundational infrastructure boost market access and rural business activity.
- Livelihood Infrastructure: Storage, markets, and production assets support income diversification.
- Climate Resilience: Infrastructure for water harvesting, flood drainage, and soil conservation protects rural livelihoods.
- Higher Employment & Consumption: 125 guaranteed days increase household earnings, stimulating the village economy.
- Reduced Distress Migration: With more rural opportunities and durable assets, migration pressures fall.
- Digital Formalisation: Digital attendance, digital payments and data-driven planning increase efficiency.
How will the new scheme benefit farmers?
Farmers benefit directly through both labour availability and better agricultural infrastructure.
- Guaranteed Labour Availability: States may notify periods aggregating up to 60 days during peak sowing/harvesting when MGNREGA work stops. This prevents labour shortages during critical farm operations and avoids labour being diverted away to guaranteed-wage worksites.
- Preventing Wage Inflation: Stopping public works during peaks prevents artificial wage inflation that raises food production costs.
- Water & Irrigation Assets: Prioritised water works improve irrigation, groundwater and multi-season cropping potential (supported by the 68,000+ Amrit Sarovar water bodies achievement).
- Better Connectivity & Storage: Core and livelihood infrastructure helps farmers store produce, reduce losses, and access markets.
- Climate Resilience: Flood-drainage, water harvesting and soil conservation protect crops and reduce damage.
How will the new scheme benefit labourers?
Labourers gain from higher guaranteed days, better wages, strong protections, and transparent systems.
- Higher Income: 125 guaranteed days = 25% more potential earnings.
- Predictable Work: Hyperlocal Viksit Gram Panchayat Plans ensure planned, advance-mapped work availability.
- Digital Payments & Protection: Electronic wages (already 99.94% in 2024-25) continue with full biometric and Aadhaar-based verification, eliminating wage theft.
- Unemployment Allowance: If work is not given, states must pay unemployment allowance.
- Asset Creation Benefits Workers Too: Workers build and benefit from improved roads, water, and livelihood assets.
Why is there a need to change MGNREGA now?
- MGNREGA was built for 2005, but rural India has transformed.
- Poverty fell sharply from 25.7% (2011–12) to 4.86% (2023–24), supported by rising consumption, incomes and financial access recorded in MPCE and NABARD RECSS surveys.
- With stronger social protection, better connectivity, deeper digital access and more diverse rural livelihoods, the old framework no longer matched today’s rural economy.
- Given this structural change, MGNREGA’s open-ended model had become outdated.
- The Viksit Bharat – Guarantee for Rozgar and Ajeevika Mission (Gramin): VB – G RAM G (विकसित भारत – जी राम जी) Bill modernises the system, raising guaranteed days, refocusing priorities, and building a more accountable, targeted, and relevant employment framework for today’s rural economy.
Why shift from demand-based to normative funding?
- Normative funding aligns MGNREGA with the budgeting model used for most Government of India schemes, without reducing the employment guarantee.
- A demand-based model leads to unpredictable allocations and mismatched budgeting. Normative funding uses objective parameters, ensuring predictable, rational planning while still guaranteeing that every eligible worker receives employment or unemployment allowance.
Does normative funding weaken the guarantee of 125 days?
No, the guarantee is strengthened with employment days increased to 125.
- Forecasting accuracy shown by FY 2024-25 when allocation matched demand perfectly
- States + Centre share responsibility
- Special relaxations allowed during disasters
- If work is not provided, the unemployment allowance is mandatory
- Thus, the right to guaranteed employment remains legally protected.
Were no attempts made to improve MNREGA earlier?
Major improvements were made, but they could not overcome deeper structural problems. Key gains (FY 13-14 vis-à-vis FY 2025-26):
- Women’s participation: 48% → 56.74%
- Aadhaar-seeded active workers: 76 lakhs → 12.11crore
- Workers on APBS: 0 → 11.93crore
- Geo-tagged assets: 0 → 6.44 crore+
- e-payments: 37% → 99.99%
- Individual assets: 17.6% → 62.96%
Despite these advances, misappropriation continued, digital attendance was bypassed, and assets often failed to match expenditure. The scale and persistence of these issues showed that MNREGA’s architecture had reached its limits, making a new, modernised Viksit Bharat – Guarantee for Rozgar and Ajeevika Mission (Gramin): VB – G RAM G (विकसित भारत – जी राम जी) Bill necessary.
What were the problems with MNREGA that necessitated a change?
While many attempts were made to improve its functioning, major systemic failures persisted:
- Investigations in 19 districts of West Bengal found non-existent works, rule violations, and fund misuse, leading to a freeze.
- Monitoring across 23 states in FY 2025–26 revealed works “not found or not commensurate with expenditure,” machine use where labour was required, and large-scale bypassing of NMMS attendance.
- In 2024–25, misappropriation totalled ₹193.67 crore across states. Only 7.61% of households completed 100 days in the post-pandemic period.
- These entrenched issues such as leakages, weak verification, and poor compliance required a new framework, not minor tweaks. The GRG Act creates a clean, digitally governed, accountable, and infrastructure-focused system.
What transparency and social protection measures are built into new Act?
- AI-based fraud detection
- Central + State Steering Committees for oversight
- Focus on 4 key verticals for rural development
- Enhanced monitoring role for Panchayats
- GPS/mobile-based monitoring
- real-time MIS dashboards
- weekly public disclosures
- stronger social audits (twice a year for every GP)
Why shift from a central sector to a centrally sponsored scheme?
Because rural employment is inherently local.
- States now share cost & responsibility
- Better incentives to prevent misuse
- Plans tailored to regional conditions through Gram Panchayat Plans
- Centre retains standards, while states execute with accountability
- This partnership model improves efficiency and reduces misuse.
Will this burden states financially?
No. The structure is balanced and sensitive to state capacity.
- Standard ratio: 60:40 (Centre: State)
- North-east & Himalayan states/UT: 90:10
- UTs without legislature: 100% funded by Central Funds
- States already paid 25% materials & 50% admin earlier
- Predictable normative allocation aids budgeting
- States can request extra support during disasters
- Better oversight reduces long-term losses from misappropriation
Why is a 60-day no-work period mandated, and what happens to workers then?
- It ensures labour availability during sowing/harvest
- Prevents sharp wage inflation that raises food prices
- Workers naturally shift to agriculture, which pays higher seasonal wages
- 60 days is aggregated, not continuous
- Workers still get 125 guaranteed days in the remaining ~300 days
- Thus, farmers and labourers both benefit.
