Summary of this article
The government will replace MGNREGA with the new VB-G RAMG Act from July 1, 2026, increasing the rural employment guarantee from 100 to 125 days per household annually.
The scheme introduces a 60:40 cost-sharing ratio between Centre and states, with a record budgetary allocation exceeding Rs 1.51 lakh crore for 2026-27.
Parliamentary panel chief Saptagiri Ulaka has criticised the abrupt transition, demanding a phased six-month overlap and warning that states may not fully participate under the new funding model.
The Government of India has officially announced that the Viksit Bharat – Guarantee for Rozgar and Ajeevika Mission (Gramin) Act, 2025 (VB-G RAM G) will come into force across the country from July 1, 2026.
This new legislation will replace the two-decade-old Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA), 2005, marking a significant overhaul of India's rural employment architecture.
The new framework significantly enhances the statutory employment guarantee, increasing the number of guaranteed wage employment days from 100 to 125 days per financial year for every rural household whose adult members volunteer for unskilled manual work. To support this expansion, the Centre has made a record budgetary allocation of Rs 95,692.31 crore for the 2026-27 fiscal year. With the expected contribution from states, the total programme outlay is anticipated to exceed Rs 1.51 lakh crore. Union Agriculture and Rural Development Minister Shivraj Singh Chouhan stated that efforts are being made to ensure wage payments are made within three days and that workers will be eligible for compensation in cases of delayed payments.
The government has assured a "seamless and worker-centric" transition to allay fears of disruption. According to the Ministry of Rural Development, all ongoing works under MGNREGA will continue without interruption until June 30 and will subsequently be carried over into the new framework . Furthermore, existing e-KYC verified MGNREGA job cards will remain valid until new "Gramin Rozgar Guarantee Cards" are issued, and workers will not be denied employment due to pending e-KYC verification.
However, the announcement has drawn sharp criticism from Saptagiri Ulaka, Chairperson of the Parliamentary Standing Committee on Rural Development and Panchayati Raj and a Congress MP. Ulaka criticised the rollout as "not thought through" and called for a more phased transition process, arguing that you "can't switch off one system and switch on another" and that a six-month overlap between the two schemes is necessary.
He also raised concerns about a severe funding shortfall under MGNREGA for the period leading up to July 1 and warned that the revised 60:40 cost-sharing ratio between the Centre and states could discourage many states from fully participating, thus undermining the universality of the Act . Echoing these concerns, activist Nikhil Dey pointed out that the new scheme shifts from a demand-driven model to a top-down, supply-driven one, making the method for determining state-wise "normative allocations" critically important .
