MGNREGA To VB–G RAM G: Dilution Of Rural Job Guarantee

Parliament on Thursday passed the Viksit Bharat—Guarantee for Rozgar and Ajeevika Mission (Gramin) (VB–G RAM G) Bill, 2025, which will replace the Mahatma Gandhi National Rural Employment Guarantee Act, 2005 (MGNREGA). The move has drawn sharp criticism from labour unions and rights groups.

Congress MP Shashi Tharoor mocked the Centre’s decision by quoting a 1971 song from Hare Rama Hare Krishna, starring Dev Anand and Zeenat Aman: “Dekho o deewano tum ye kaam na karo, Ram ka naam badnaam na karo.”

Opposition MPs, joined by some NDA allies, argue that the Bill is far more than a bureaucratic revision. They say it undermines the core philosophy of a programme that became one of India’s most far-reaching welfare initiatives, supporting millions of households across the country.

The new Bill converts a rights-based entitlement, where funding must follow demand, into a capped budgetary programme limited by a pre-determined financial ceiling, that is operational only in specific areas.

The government insists the new scheme offers stronger guarantees, raising assured workdays from 100 to 125 and introducing weekly wage payments. However, critics, including welfare economist Jean Drèze, remain unconvinced. While the Ministry has described the Bill as a “major upgrade” that addresses structural flaws and improves transparency, planning and accountability through digital attendance, payments and data-driven processes, sceptics warn that these changes could weaken the scheme’s rights-based foundation.

What was MGNREGA?

The 2005 legislation created a universal right to work in rural India. Any rural resident willing to undertake unskilled manual labour was entitled to employment. Crucially, it was demand-driven: work had to be provided within 15 days of a request, failing which workers were eligible for an unemployment allowance.

Decentralised and Fully Funded by the Centre

Under MGNREGA, every rural household is guaranteed at least 100 days of paid work each financial year. Funding is open-ended — if work is demanded, the government is legally bound to provide and finance it. Since its inception, the scheme has functioned as a rights-based safety net, supporting millions of families during droughts, crop failures and lean agricultural periods.

The programme allowed work to be demanded at any time of the year, strengthening the bargaining power of women and landless workers while addressing wage inequality. “It was the only job guarantee scheme that paid men and women equal wages,” said Annie Raja, General Secretary of the National Federation of Indian Women.

The Centre bore full responsibility for unskilled wages and most material costs. While labour wages were paid entirely by the Union government, states met 25 per cent of material expenses and covered unemployment allowances, with an overall cost-sharing ratio of 90:10.

In keeping with the 73rd Constitutional Amendment, the Act decentralised planning and implementation. Gram Sabhas identified local priorities, and gram panchayats carried out at least half the works, focusing on areas such as water conservation, drought-proofing and land development.

MGNREGA also introduced community-led social audits through Gram Sabhas. When the Bill was first introduced, it was referred to a Standing Committee chaired by BJP leader Kalyan Singh and was later passed unanimously by Parliament.

What does the new Bill state?

The new Bill withdraws the legal guarantee of work. Under Section 5, states can provide employment only in rural areas notified by the Union government. If an area is not notified, residents lose the right to demand work, reducing the programme to a discretionary scheme under central control.

More Days Promised, Fewer Delivered

Section 5(1) of the VB–G Ram G Bill raises the guaranteed work limit to 125 days per rural household, compared to 100 days under MGNREGS. However, in practice, few households have ever reached the existing limit. In 2024–25, the average employment per household was around 50 days. Only 40.7 lakh households completed 100 days last year, and just 6.74 lakh have done so in the current financial year. Economist Jean Drèze notes that barely 2 per cent of households receive the full 100 days, with most falling far short.

Higher State-Level Burden

Sections 4(5) and 4(6) allow the Union government to fix state-wise allocations each year, with states required to fund any excess spending. This effectively caps employment days and transforms a demand-driven legal right into a supply-led scheme tied to a fixed budget.

“This Bill centralises power while shifting financial responsibility to the states,” said Drèze. “Earlier, Union funding gave the guarantee meaning. Now the Centre promises jobs, without guaranteeing work.”

Seasonal Work Blackouts

Unlike the earlier framework, which guaranteed work throughout the year, Section 6 of the new Bill mandates a 60-day “blackout” during the peak agricultural season, to be notified by state governments. No work can be provided during this period, denying employment to those willing to work. Women and landless workers are likely to be hit hardest, weakening the scheme’s role as a safety net and eroding their bargaining power.

Scope for Political Discretion

Sections 4(5) and 22(4) cap central funding through state-wise normative allocations set annually by the Union government, based on parameters it defines. Critics warn this opens the door to political bias. “The Centre can choose which states to fund and which to exclude, especially Opposition-ruled states,” said economist Jean Drèze.

Under the Bill, the cost-sharing ratio is 60:40 between the Centre and states, and 90:10 for North-Eastern and Himalayan states. Any spending beyond the allocated limit must be met entirely by the states. Section 22(8) also leaves states responsible for paying unemployment allowances.

“The Union government is pushing states into severe financial stress,” Drèze said. “States will be forced either to suppress demand for work or to fund the entire programme themselves, which is simply not feasible. This will hurt both high-performing states like Andhra Pradesh and poorer states such as Bihar.”

Rollback of Local Self-Governance

Unlike MGNREGA that was rooted in local self-governance the new Bill rolls back decentralised planning. Rural works will now be planned through “Viksit Gram Panchayat Plans”, consolidated at the block, district and state levels, and merged into the Viksit Bharat National Rural Infrastructure stack. Under Section 4, this stack is aligned with the PM Gati Shakti National Master Plan.

Schedule I, Clause 6(4) states that the infrastructure stack will guide states and Panchayati Raj institutions in identifying infrastructure gaps, standardising designs and ensuring investments meet centrally defined targets. In effect, local planning is recast as data input for a national infrastructure database, rather than a reflection of local needs. Critics argue this weakens the Gram Sabha and undermines the spirit of the 73rd Constitutional Amendment.

“Everything will now run through this infrastructure stack, which no one fully understands,” said Rajendran Narayanan, Associate Professor at Azim Premji University. “The poor should not be treated as test subjects for unproven technologies. They bear the highest cost when systems fail.”

The Bill defines the Viksit Bharat National Rural Infrastructure Stack as a consolidated pool of proposed works drawn from village, district and state plans, aligned with four thematic areas. While social audits are retained, they are routed through a centralised system, raising concerns about accessibility and effectiveness for workers.

Technology-Driven Controls and Exclusion Risks

Section 24(a) mandates biometric authentication for workers and officials at worksites. Experts warn this is problematic for agricultural and construction workers, whose fingerprints are often worn down by manual labour, leading to authentication failures.

Workers’ organisations have long flagged the risks of imposing digital attendance and Aadhaar-based payment systems under MGNREGA, which have caused large-scale exclusions in recent years. These concerns prompted the Ministry of Rural Development to issue a circular in July 2025, directing the creation of NMMS monitoring cells to verify attendance photographs after repeated cases of misuse were reported.

Why is there Opposition?

Critics warn that the new law could push wages below the already modest ₹200 a day. In the past, powerful landowners often resisted paying minimum wages, a trend MGNREGA helped curb. “This law will only benefit large and corporate farmers by providing cheap labour,” said Raja. “When poverty is widespread and families are desperate, people will work even for ₹25. That will deepen poverty.”

While many farmers benefited from MGNREGA, the new law introduces fresh hurdles, including renewing job cards every three years and linking them to insurance numbers. “There is a clear tendency to put obstacles at every stage,” added Drèze.

For landless and Dalit workers, MGNREGA offered crucial bargaining power against wealthy landowners. “This Bill is anti-landless and anti-Dalit,” argued Rajendran Narayanan.

Economists also question the logic of scrapping the older framework. MGNREGA wages had a strong multiplier effect in rural economies. In contrast, critics say the new law does little to improve workers’ lives, while its heavy reliance on technology risks excluding the poorest.