Presidential assent raises guarantee and reshapes funding On 23 December 2025 President Droupadi Murmu gave assent to the VB‑G RAM G Act, replacing MGNREGA and increasing the statutory work guarantee from 100 to 125 days per rural household per year[1][2]. The law retains a 15‑day unemployment allowance for households that receive no work, while centralising the scheme’s notification and allocation powers[2]. The central government’s contribution rises to roughly ₹95,000 crore, but the cost‑sharing ratio shifts to a 60:40 centre‑state split for most states, with a 90:10 split for northeastern, Himalayan states and Jammu & Kashmir[1][2].

Decentralised planning preserved amid central‑control concerns Gram panchayats and gram sabhas continue as the primary planning and implementation bodies, with Viksit Gram Panchayat Plans aggregated upward through blocks and districts[1][4]. The act formalises participatory planning while granting the Union discretionary authority over project locations and normative allocations, prompting critics to warn of reduced state autonomy and potential bias in fund distribution[3][2]. Pro‑reform commentary frames the change as a renewal that links welfare to durable rural assets rather than a demolition of MGNREGA’s rights‑based core[1].

Funding model rebalanced, budget earmarked for outcomes The scheme is classified as a Centrally Sponsored Scheme, with the centre covering wage bills and states bearing administrative costs under the new 60:40 split, while the 90:10 ratio applies to the eight northeastern and Himalayan states[4][5]. Approximately $9.5 billion has been allocated for the current financial year, earmarked for “Sampooran Vikas” comprehensive village development plans and four focus areas: water security, core rural infrastructure, livelihood‑related infrastructure, and extreme‑weather mitigation[4][5]. Critics note that despite the larger budget, past data show only about 7 % of households received the full 100 days in 2023‑24, raising doubts about actual work generation[2].

Unemployment allowance and penalty mechanisms introduced The act introduces a statutory unemployment allowance payable by state governments if work is not provided within 15 days, alongside penalties for wage‑payment delays to improve enforcement[2][4]. States may declare up to a 60‑day “no‑work” window each fiscal year to accommodate peak agricultural seasons, balancing labor needs with farming cycles[5]. While the allowance aims to close gaps between promise and reality, opposition parties argue that the centralised discretion could undermine the entitlement’s universality[3].

Political rollout and public awareness campaign The government plans a nationwide awareness drive to inform rural households about the new VB‑G RAM G scheme, scheduled ahead of the Congress Working Committee’s meeting on 27 December to debate the replacement of MGNREGA[5]. Union Rural Development Minister Shivraj Singh Chouhan has released a video defending the reforms, emphasizing outcome‑based delivery and the strengthened guarantee[4]. The divergent narratives—government framing as outcome‑oriented renewal versus opposition warnings of rights erosion—highlight the contested nature of the reform’s implementation[3].