The central government is set to propose a new federal jobs scheme, the Developed India Guarantee for Employment and Livelihoods Mission (Rural) or VB-G RAMG, to replace the two-decade-old Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS), which was the showpiece of the previous United Progressive Alliance administration.
Copies of the VB-G Ram G Bill, 2025 were circulated on Monday and it has been listed for introduction in the Lok Sabha on Tuesday. However, it has sparked controversy, with government officials saying it is in line with the vision of a developed India by 2047 and the opposition criticizing the removal of Gandhi’s name from the flagship scheme.
The new scheme proposes to provide a statutory guarantee of 125 days of wage employment in each financial year to every rural household whose adult members volunteer to do unskilled manual work. The Bill states that within six months from the date of commencement of the VB-G RAM G Act, states will have to formulate a scheme in line with the provisions of the new law.
“In today’s vastly changed circumstances, a transformational approach to rural development is necessary to achieve the objectives of Developed India @2047… It is imperative to engage the rural workforce more effectively to support the vision of Developed India, while empowering them through enhanced livelihood guarantees. Therefore, the Government has increased the wage-employment guarantee for rural households from 100 days per financial year to 100 days per financial year for rural asset creation through the enactment of an appropriate Act. It has been resolved to do it for 125 days,” Union Rural Development Minister Shivraj Singh Chouhan said in a statement explaining the purpose and reasons of the bill. Congress attacked the government. Party chief Mallikarjun Kharge said on Twitter, “The Congress party will strongly oppose in Parliament and on the streets any decision of this arrogant regime which is against the poor and workers. We will not allow the rights of crores of poor, laborers and workers to be snatched away by those in power.”
The new scheme proposes a major deviation from the MGNREGS framework on three key parameters – funding, availability of work and central monitoring on distribution of funds.
On funding, the Bill proposes that the financial liability will be shared between the Central and State Governments in the ratio of 90:10 for the North-Eastern and Himalayan States and 60:40 for all other States and Union Territories with Legislative Assemblies. For Union Territories without legislature, the entire cost will be borne by the Centre.
On availability, the bill proposes pausing the program during the farming season to ensure availability of farm workers, the first such step in a federal program. The bill states, “State governments shall notify in advance a period of sixty days in the aggregate in a financial year, including the peak agricultural season of sowing and harvesting, during which work will not be carried out under this Act.”
With central oversight, the Bill proposed that the Central Government would determine the state-wise standard allocation for each financial year, based on objective parameters determined by the Union. MGNREGA was a 100% centrally sponsored scheme. MGNREGS was a demand-driven scheme in which the central government was obliged to allocate more funds for additional demand for work. But under the proposed scheme, the Center will determine the state-wise standard allocation for each financial year. Additional expenditure incurred by a State will be borne by the State Government. The wage rate will be specified by the Central Government through a notification. The bill states that it should not be less than the wage rates prevailing under MNREGA. Until the wage rates are notified by the Centre, MNREGA wage rates will continue to be applicable in the areas covered under the new Act.
“The primary objective of the Bill is to align the rural development framework with the national vision of Developed India @2047 by providing an enhanced statutory wage-employment guarantee of 125 days in each financial year to rural households whose adult members volunteer to do unskilled manual work, thereby enabling them to participate more effectively in the extended livelihood security framework,” Chouhan said in the statement of objects and reasons of the bill.
Senior government officials, speaking on condition of anonymity, said the new Act focuses on four major types of functions – water security (conservation, irrigation, rejuvenation of water bodies, afforestation, etc.); Core rural infrastructure (activities like construction and upgradation of rural roads, panchayat buildings, anganwadis, etc.); Creation of livelihood-related infrastructure (creation of assets to enhance rural prospects such as training centres, rural haats, grain storage, etc.); and climate adaptation (activities related to disaster risk reduction, climate adaptation).
“The new Act represents a major upgrade on MGNREGA, fixing structural weaknesses while enhancing employment, transparency, planning and accountability, while focusing on sustainable assets that directly support water security, core rural infrastructure, creation of livelihood-related infrastructure and climate adaptation,” said an official, requesting anonymity.
In addition to strengthening the rural economy through higher incomes and improved resilience, the proposed plan will reduce distress migration with more rural opportunities, officials said. An official said, “As per the provisions, farmers will directly benefit through both labor availability and better agriculture infrastructure. Laborers will benefit from higher guaranteed days, better wages, stronger security and transparent system and unemployment allowance. If work is not given, states will have to pay unemployment allowance.”
The Bill states that if an applicant is not provided employment within 15 days, he is entitled to daily unemployment allowance. This scheme will be managed by the Central Rural Employment Guarantee Council constituted by the Central Government. “The Central Council shall consist of the Chairman, representatives of the Central Government and State Governments, not more than 15 non-official members representing Panchayati Raj Institutions, workers’ organizations and weaker sections of the society and a Member Secretary not below the rank of Joint Secretary to the Government of India.”
MNREGA was directly controlled by the Union Ministry of Rural Development, without any special council or body.
The Bill states that each State shall also constitute a State Council to be known as the State Rural Employment Guarantee Council. The Central Government will also create a National Level Steering Committee to recommend decisions relating to standard allocation to the States and advise on matters requiring inter-ministerial consultation, including convergence framework, and to provide high-level monitoring for effective implementation of this Act. There will be steering committees in the states also.
The scheme allows Panchayats at the district, intermediate and village levels to become the principal authorities for planning, implementation and monitoring of the scheme.
Enacted in 2005, MNREGA was the showpiece of the Congress-led UPA and was at the heart of its social security framework. The 20-year-old law is credited with setting a ceiling for rural wages, creating a durable cushion to prevent marginal rural families from falling into poverty and energizing Congress during a surprisingly strong showing in 2009. But it has also faced major criticism over corruption, opaque processes, poor quality work and long delayed payments.
Two senior officials, speaking on condition of anonymity, said that in 2022, Prime Minister Narendra Modi had expressed concern that funds earmarked for MGNREGS were used to favor more prosperous states rather than poorer ones.
“The Prime Minister raised a valid point that the objective of the program is poverty alleviation, but poor states are not getting the required share of MGNREGS funds,” said one of the officials present at the meeting.
Modi had also pointed out discrepancies in the amount of work in different states, which needed to be addressed, the second official said. “The PM said that in some states, an MNREGA beneficiary has to do the equivalent of digging a 2-feet hole in the ground, while in some other states, more labor would be required to complete one person day,” said another official present at the meeting.
