Introduction
The Ministry of Rural Development has released draft rules for the Viksit Bharat–Guarantee for Rozgar and Ajeevika Mission (VB-G RAM G) Act, 2025, which will replace the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) from July 2026.
Key Highlights of Draft Rules
Shift to Normative Allocation Funding Model
- The draft rules move away from MGNREGA's open-ended, demand-driven funding model
- Central allocations will now act as a spending ceiling based on the 16th Finance Commission's horizontal devolution formula
- This represents a fundamental shift in how rural employment programs are funded
Allocation Formula Based on 16th Finance Commission Criteria
| Criteria | Weightage |
|---|---|
| GSDP Distance | 42.5% |
| Population | 17.5% |
| Other metrics (6 criteria) | 10% each |
- GSDP Distance measures how far a State's per capita income falls below the wealthiest States
- This formula ensures poorer States receive larger shares of Central funds
- Larger States benefit from the population weightage component
Revised Cost-Sharing Ratio
| Category of States | Centre:State Ratio |
|---|---|
| General States | 60:40 |
| Northeastern & Himalayan States | 90:10 |
- Under MGNREGA, Centre paid 100% of the wage bill
- Any expenditure beyond normative allocation must be borne entirely by the State
Performance-Linked Funding
- From the second year of implementation, a portion of Central allocation will be contingent on State performance
- Performance criteria include:
- Timely payment of wages
- Strict compliance with social audit requirements
- Percentage of completed public works
Governance Mechanisms
National Level Steering Committee
- 16-member committee headed by Union Rural Development Secretary
- Mandate: Recommend normative allocations to States, set standards, and monitor guidelines
- Composition includes:
- At least 5 State government representatives (nominated by Centre)
- Representatives from NITI Aayog
- Representatives from other Union Ministries
Central Gramin Rozgar Guarantee (GRG) Council
- Headed by Union Minister for Rural Development
- Advises Centre on overall implementation of the new law
Enhanced Employment Provisions
Increased Employment Guarantee
- Guaranteed rural wage employment increased from 100 days to 125 days annually
- Applies to every rural household willing to undertake unskilled manual work
Timely Wage Payment
- Mandates wage payment within 15 days of completion of work
60-Day Agricultural Pause
- State governments can notify a combined 60-day no-work period during peak sowing and harvesting seasons
- Purpose: Prevent agricultural labour shortages
- Workers still receive 125 days of employment during the remaining part of the year
Infrastructure and Planning
Viksit Bharat National Rural Infrastructure Stack
- Links employment generation with durable rural infrastructure creation
- Focus areas:
- Water conservation
- Rural connectivity
- Livelihood infrastructure
- Climate resilience projects
Decentralised and Spatial Planning
- Mandates preparation of Viksit Gram Panchayat Plans
- Uses spatial technologies including Yuktdhara portal
- Integration with national planning platform PM Gati Shakti
Transition Provisions
- Existing e-KYC-verified MGNREGA job cards will remain valid during transition
- New Gramin Rozgar Guarantee Cards will be issued to workers
Constitutional and Policy Context
- Related to Article 21A (Right to Education) indirectly through livelihood improvement
- Aligns with Directive Principles of State Policy (Part IV) on right to work
- Follows 14th Finance Commission recommendations on fiscal devolution
- Consistent with 72nd and 73rd Constitutional Amendments on Panchayati Raj
Significance for India
- Fiscal Discipline: Shifts from open-ended spending to capped allocations
- Equity Focus: GSDP Distance weightage ensures equitable distribution favoring poorer States
- Accountability: Performance-linked funding creates State-level accountability
- Infrastructure Development: Links employment with lasting infrastructure creation
- Agricultural Considerations: 60-day pause shows sensitivity to seasonal agricultural needs
UPSC Previous Year Questions Related
Prelims (2011): Question on MGNREGA eligibility - Answer was adult members of any household
Mains (2016): Essay on poverty eradication through liberation from deprivation
Mains (2015): Analysis of poverty alleviation programs and political will