VB-G RAM G vs MGNREGA: Key Changes Rural Workers Need to Know

MGNREGA makes way for VB-G RAM G as Parliament clears a new rural jobs law promising 125 workdays, digital monitoring, seasonal limits and higher cost-sharing by states.

Parliament has approved a sweeping overhaul of India’s rural employment framework with the Lok Sabha passing the Viksit Bharat Guarantee for Rozgar and Ajeevika Mission (Gramin) Bill, 2025. The new law repeals the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) and signals what the government calls a structural shift in how rural jobs are planned, funded and delivered.

Introduced as part of the broader push towards “Viksit Bharat 2047”, the new framework promises more workdays, tighter planning, and a technology-driven governance model. But it also alters the balance of financial responsibility between the Centre and the states, moving away from the fully demand-driven nature of MGNREGA.

Here’s a closer look at what changes — and what it could mean on the ground.

From 100 to 125 Days of Guaranteed Work

MGNREGA, enacted in 2005 as the National Rural Employment Guarantee Act and renamed in 2009, guaranteed 100 days of wage employment in a financial year to rural households willing to do unskilled manual work.

The new VB-G RAM G Bill raises this ceiling, offering a statutory guarantee of 125 days of wage employment, positioning it as a more ambitious employment assurance scheme in numerical terms.

Demand-Driven vs Normative Allocation

One of the most significant departures lies in how funds are allocated.

MGNREGA is demand-driven, meaning the Centre is legally bound to provide funds if rural households demand work. In years of distress — droughts, floods or economic slowdowns — allocations typically expand automatically.

Under VB-G RAM G, the Centre will provide a normative allocation to each state. If spending exceeds this limit, state governments will have to bear the additional cost, effectively shifting some fiscal risk away from the Centre.

A New Cost-Sharing Formula

Under MGNREGA:

• 100% of wages are paid by the Centre
• Material costs are shared in a 75:25 ratio between the Centre and states

VB-G RAM G introduces a revised sharing structure:

• 90:10 (Centre:State) for northeastern and Himalayan states
• 60:40 for all other states and Union Territories with legislatures
• 100% Central funding for Union Territories without legislatures

This marks a clear increase in states’ financial responsibility compared to the previous regime.

Seasonal Limits on Seeking Work

MGNREGA allowed workers to demand employment at any time of the year, subject to availability of work.

The VB-G RAM G Bill introduces a restriction: states will notify periods covering peak agricultural seasons of sowing and harvesting, during which employment cannot be sought under the scheme. The intent is to prevent labour shortages in agriculture, but it also narrows worker flexibility.

Reframing the Nature of Rural Works

MGNREGA works were grouped under broad categories such as:

• Water conservation
• Drought-proofing
• Irrigation
• Renovation of traditional water bodies
• Land development and flood control

VB-G RAM G reorganises this into four thematic focus domains:

• Water security through water-related works
• Core rural infrastructure
• Livelihood-related infrastructure
• Works for mitigation of extreme weather events

The shift reflects a stronger alignment with climate resilience and infrastructure-led development.

Planning Moves Closer to National Frameworks

Under MGNREGA, gram panchayats played a central role in project identification. Decisions were made in open gram sabha or ward sabha meetings, with at least 50% of works (by cost) mandated to be implemented through gram panchayats.

VB-G RAM G retains the panchayat as the planning unit but introduces a new layer of integration. Works will originate from Viksit Gram Panchayat Plans, which will be integrated with the PM Gati Shakti National Master Plan — tying village-level employment works to national infrastructure priorities.

Panchayats Categorised for ‘Saturation-Mode’ Planning

MGNREGA treated all panchayats uniformly.

The new Bill classifies every panchayat into Category A, B or C, based on development parameters. Each panchayat will then prepare saturation-mode plans, aiming to systematically fill infrastructure and livelihood gaps rather than responding only to immediate job demand.

A Strong Push Towards Digital Governance

Perhaps the most striking shift is technological.

The VB-G RAM G Bill proposes a “comprehensive digital ecosystem”, including:

• Biometric authentication at multiple levels
• GPS or mobile-based worksite monitoring
• Proactive public disclosures
• Use of artificial intelligence for planning, audits and fraud risk mitigation

These measures aim to modernise accountability and curb leakages — features not explicitly provided for under MGNREGA.