The Viksit Bharat — Guarantee for Rozgar and Ajeevika Mission (Gramin) Act, 2025 (VB-G RAM G Act) officially replaced the Mahatma Gandhi National Rural Employment Guarantee Act, 2005 (MGNREGA) after receiving Presidential assent from President Droupadi Murmu on December 21, 2025. The Bill had been introduced in Lok Sabha on December 16 and passed by Parliament on December 18, amidst protests and walkouts from the Opposition. The landmark legislation significantly enhances rural employment guarantees: the annual employment entitlement for a rural household increases from 100 days (under MGNREGA) to 125 days under the new law. A critical structural change is the 60:40 cost-sharing arrangement between the Centre and states for unskilled wage costs — a departure from MGNREGA under which the Central government bore 100% of unskilled wage costs. Works under the new scheme are organised around four thematic domains: (i) water security, (ii) rural infrastructure, (iii) livelihood-related infrastructure, and (iv) mitigation of extreme weather events. The scheme is explicitly framed within the 'Viksit Bharat 2047' vision, aligning rural employment with aspirational development goals. Critics and opposition parties argue that the 40% state cost-share will disproportionately burden fiscally weaker states, potentially reducing actual employment delivery. Labour economists have also raised concerns about weakening the demand-driven nature of MGNREGA — which gave workers a legal right to employment — by shifting towards a supply-side, scheme-based approach. The Rajasthan government, which has one of the highest MGNREGA worker populations in India, will be among the states most significantly impacted by the new cost-sharing model.
VB-G RAM G Act 2025 Will Replace MGNREGA from July 1, 2026: Rural Households Get 125 Days Employment Guarantee, States Share 40% Cost in New Framework
The Viksit Bharat — Guarantee for Rozgar and Ajeevika Mission (Gramin) Act, 2025 (VB-G RAM G Act) officially replaced the Mahatma Gandhi National Rural Employment Guarantee Act, 2005 (MGNREGA) after receiving Presidential assent from President Droupadi Murmu on December 21, 2025. The Bill had been introduced in Lok Sabha on December 16 and passed by Parliament on December 18, amidst protests and walkouts from the Opposition. The landmark legislation significantly enhances rural employment guarantees: the annual employment entitlement for a rural household increases from 100 days (under MGNREGA) to 125 days under the new law. A critical structural change is the 60:40 cost-sharing arrangement between the Centre and states for unskilled wage costs — a departure from MGNREGA under which the Central government bore 100% of unskilled wage costs. Works under the new scheme are organised around four thematic domains: (i) water security, (ii) rural infrastructure, (iii) livelihood-related infrastructure, and (iv) mitigation of extreme weather events. The scheme is explicitly framed within the 'Viksit Bharat 2047' vision, aligning rural employment with aspirational development goals. Critics and opposition parties argue that the 40% state cost-share will disproportionately burden fiscally weaker states, potentially reducing actual employment delivery. Labour economists have also raised concerns about weakening the demand-driven nature of MGNREGA — which gave workers a legal right to employment — by shifting towards a supply-side, scheme-based approach. The Rajasthan government, which has one of the highest MGNREGA worker populations in India, will be among the states most significantly impacted by the new cost-sharing model.
Key facts
- VB-G RAM G Act 2025 replaced MGNREGA after receiving Presidential assent on December 21, 2025.
- Employment guarantee for rural households increased from 100 days (MGNREGA) to 125 days.
- A 60:40 Centre-state cost-sharing for unskilled wages replaces MGNREGA's 100% Central funding.
- Works are organised around water security, rural infrastructure, livelihood, and extreme weather mitigation.
- Critics argue the 40% state cost-share will burden fiscally weaker states and reduce employment delivery.
- Rajasthan with among the highest MGNREGA workers will be most impacted by the new cost-sharing model.
Mains angle
Q: Analyse the VB-G RAM G Act 2025's replacement of MGNREGA, focusing on the 125-day guarantee, the 60:40 cost-sharing shift, thematic work domains and implications for Rajasthan's rural workforce.
Answer (50 words):
President Droupadi Murmu assented to the VB-G RAM G Act 2025, which is notified to replace MGNREGA from 1 July 2026. The annual rural household guarantee rises from 100 to 125 days. Centre-State cost-sharing shifts to 60:40, organised around water security, rural infrastructure, livelihoods and weather mitigation, significantly impacting Rajasthan's large MGNREGA worker base.
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Under the VB-G RAM G Act, 2025, what is the Centre-state cost-sharing pattern for wages and scheme costs in most states?
PRS notes that the VB-G RAM G framework shifts the programme to a centrally sponsored scheme. For states other than the North-eastern and Himalayan states, the Centre-state sharing pattern is 60:40 for wages, material costs and administrative costs; the North-eastern and Himalayan states follow 90:10.
Frequently asked questions
What is the VB-G RAM G Act 2025 and which earlier law did it replace?
The VB-G RAM G Act 2025 (Viksit Bharat — Guarantee for Rozgar and Ajeevika Mission (Gramin) Act, 2025) replaced the Mahatma Gandhi National Rural Employment Guarantee Act, 2005 (MGNREGA). It received Presidential assent from President Droupadi Murmu on December 21, 2025.
How many days of employment guarantee does the VB-G RAM G Act 2025 provide to rural households?
The VB-G RAM G Act 2025 increased the employment guarantee for rural households from 100 days (under MGNREGA) to 125 days per year.
What is the new cost-sharing model under VB-G RAM G Act 2025 compared to MGNREGA?
Under MGNREGA, unskilled wages were funded 100% by the Central Government. The VB-G RAM G Act 2025 introduces a 60:40 Centre-state cost-sharing model, where states must bear 40% of unskilled wage costs.
What are the four work categories under the VB-G RAM G Act 2025?
Works under the VB-G RAM G Act 2025 are organised around four areas: water security, rural infrastructure, livelihood enhancement, and extreme weather mitigation.
Why is the VB-G RAM G Act 2025 particularly significant for Rajasthan?
Rajasthan is among the states with the highest number of MGNREGA workers, making it one of the most impacted states under the new 60:40 cost-sharing model. The shift in funding pattern could strain Rajasthan's rural employment delivery capacity.
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