The VB-G RAM-G Act replaces MGNREGA from July 1, 2026, increasing the employment guarantee from 100 to 125 days and introducing a ₹300/day national wage floor.
Punjab's AAP government unanimously rejected the scheme in a December 2025 Assembly resolution then quietly notified it in a U-turn four days before the launch deadline.
Tamil Nadu under the new TVK government cleared the rollout, with the state notifying it at ₹345/day.
On June 30, 2026, The Mahatma Gandhi National Rural Employment Guarantee Act — MGNREGA — the programme that for twenty years gave rural households a legal right to 100 days of paid work, was replaced by the Viksit Bharat-Guarantee for Rozgar and Ajeevika Mission (Gramin), known as VB-G RAM-G.
Union Rural Development Minister Shivraj Singh Chouhan called the transition a historic day. The opposition called it the burial of a right-based law. And across India's state capitals, the scramble to figure out whether to comply has produced a story that is, at its core, about a simple question: who will pay?
What Is The VB-G RAM-G Scheme?
The Viksit Bharat-Guarantee for Rozgar and Ajeevika Mission (Gramin) Act was passed in the Winter Session of Parliament in December 2025. The law replaces MGNREGA, which had been in force since 2005 under UPA-era legislation originally championed by Sonia Gandhi and economist Jean Drèze.
The headline differences from MGNREGA are three: the employment guarantee rises from 100 to 125 days per rural household per year; a ₹300 per day national minimum wage floor is introduced for the first time; and funding shifts from a near-complete central burden to a 60:40 Centre-state split, with Himalayan and north-eastern states bearing only 10%. The new arrangement substantially increases state financial exposure.
Supporters argue the scheme incentivises states to manage funds responsibly, eliminates corruption in disbursement, and creates better rural assets.
Why Punjab Says It Cannot Afford The New Model
Punjab's opposition to VB-G RAM-G began long before it became a compliance question. In December 2025, Chief Minister Bhagwant Mann convened a special one-day session of the Punjab Legislative Assembly which unanimously passed a resolution declaring the VB-G RAM-G Act an assault on the interests of Dalit labourers, rural poor, women, and OBC communities.
On the financial front, Punjab already carries one of the highest debt-to-GSDP ratios among major Indian states. Under VB-G RAM-G's 60:40 model, Punjab's annual liability would rise sharply.
Yet six months later, on June 26, 2026, the Punjab Department of Rural Development and Panchayats quietly issued a gazette notification implementing VB-G RAM-G from July 1. Opposition leader Partap Singh Bajwa of Congress demanded to know whether the unanimous Assembly resolution had been a publicity stunt.
Why Tamil Nadu Has Cleared Its Rollout
Tamil Nadu's situation carries a very different political character. The state is now governed by the Tamilaga Vettri Kazhagam (TVK) under Chief Minister C. Joseph Vijay, the former Tamil film star who led his newly-founded party to a stunning upset victory in the April 2026 Assembly elections, becoming the first Chief Minister not from the DMK or AIADMK since 1967.
Unlike the outgoing DMK government, which had opposed the VB-G RAM-G Bill in Parliament and raised concerns about its impact on states' interests, the new TVK administration had no inherited ideological position against the scheme.
Tamil Nadu's notified wage under VB-G RAM-G is ₹345 per day — above the national floor of ₹300 and reflecting the state's higher rural wage levels. The Centre's notification covering wages across all states, issued on July 1, listed Tamil Nadu among states with above-floor wage rates, alongside Telangana, Andhra Pradesh, Maharashtra, Karnataka, Kerala, Goa, and Haryana.
Which Other States Have Raised Objections?
Punjab and Himachal Pradesh were the loudest opponents, but an RTI reply obtained by the National Campaign for People's Right to Information (NCPRI) and reported by The Wire revealed that at least three states had explicitly sought a reconsideration of the 60:40 funding formula and two of them were BJP-ruled. Bihar, Madhya Pradesh, and Jharkhand all wrote to the Union Rural Development Ministry raising concerns about the increased financial burden.
Five states also sought revisions to wage rates, arguing current rates fell below market wages. Four objected to a mandatory 60-day ban on employment during peak agricultural seasons a provision designed to ensure workers return to farms during harvest, but which critics argue removes the programme's value precisely when rural distress is highest.
Is This Becoming A New Centre Vs States Flashpoint?
The rollout of VB-G RAM-G has exposed a recurring tension in India's federal architecture: the Centre designs and legislates major social programmes, but the delivery apparatus belongs to the states.
For opposition-ruled states, VB-G RAM-G layers a new grievance onto existing ones. The INDIA bloc's constituent parties had made the restoration of MGNREGA a signature demand before the scheme's replacement. The quiet compliance by Punjab and Himachal Pradesh, and the acceptance by Tamil Nadu's new TVK government, suggests that the room for resistance has narrowed considerably. The cost of staying out of the national framework is simply too high for most state economies to absorb.
