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President Assents to VB‑G RAM G Act, Extending Rural Job Guarantee to 125 Days

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President Assents, Replaces MGNREGA with VB‑G RAM G Act President Droupadi Murmu gave assent in late December, formally repealing the Mahatma Gandhi National Rural Employment Guarantee Act and enacting the VB‑G RAM G Act 2025 [1][2][3][4]. The new law guarantees up to 125 days of unskilled manual work per rural household each financial year and introduces an unemployment allowance if work is not offered within 15 days [1][2][4]. Central authorities retain the power to notify the scheme and allocate funds, while states remain legally responsible for delivering employment [2][3].

Funding Model Shifts to Centre‑State Cost Sharing The act moves the cost‑sharing ratio from the historic 90:10 split to a 60:40 centre‑state split for most states, with a 90:10 arrangement retained for northeastern, Himalayan states and Jammu & Kashmir [1][2][3][4][5]. The centre’s contribution rises to roughly ₹95,000 crore (about $9.5 billion) for the current fiscal year, covering wage bills while states fund administrative expenses [2][4]. This financing structure is intended to sustain the expanded guarantee while giving states greater fiscal responsibility [1][5].

Decentralised Planning Preserved but Central Allocation Strengthened Gram panchayats continue as the primary planning and implementation bodies, with gram sabhas approving local work plans [1][5]. However, the legislation grants the Union government discretionary authority over normative state allocations and overall project direction [3][4]. Integrated “Viksit Gram Panchayat” plans will be aggregated at block, district and state levels and linked to the PM Gati Shakti platform, while a 60‑day “no‑work” window allows states to pause works during peak sowing and harvesting periods [5][3].

Early Impact Data Shows Limited Coverage but Positive Outcomes LibTech India’s tracker reported that only about 7 % of rural households received the full 100 days of work in 2023‑24, underscoring a gap between statutory guarantees and on‑ground delivery [2]. Independent studies nonetheless attribute a 14 % rise in beneficiary earnings and a 26 % reduction in poverty to the scheme’s operation [2]. Persistent challenges include wage‑payment delays, under‑funding, and uneven state performance, which the Economic Survey flags as major constraints on work generation [2][1].

Political Debate Highlights Centralisation Concerns and Rights Arguments Critics argue the reform centralises control, turning a constitutionally‑derived right to livelihood into a discretionary program, and cite the 1985 Olga Tellis Supreme Court judgment linking livelihood to the right to life [3][2]. Opposition parties plan a parliamentary debate on replacing MGNREGA, while Union Rural Development Minister Shivraj Singh Chouhan defends the act as a “step forward” emphasizing outcomes over mere works [4][5]. The divergent views reflect tension between perceived efficiency gains and fears of eroding local autonomy and rights‑based protections [3][2].

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Timeline

Nov 12, 1985 – The Supreme Court’s Olga Tellis judgment links the constitutional right to life with a right to livelihood, stating that “the right to livelihood is part of the right to life”[3]. This precedent underpins India’s legal justification for a nationwide rural employment guarantee and becomes a benchmark for later schemes such as MGNREGA.

Aug 25, 2005 – The Government launches the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA), promising 100 days of wage‑employment per rural household each year. The program quickly earns praise for universal coverage, gender‑inclusive participation, and measurable poverty‑reduction impacts, later cited as a “stellar example of rural development” by the World Bank[3].

Dec 15, 2025 – The Centre circulates the Viksit Bharat—Guarantee For Rozgar And Ajeevika Mission (Gramin) Bill to Parliament, proposing to replace MGNREGA. The draft raises the statutory guarantee to 125 days, centralises state‑wise normative allocations, and codifies digital tools such as Aadhaar‑linked payments and geotagged work sites[6]. It frames the change as necessary for “rural transformation” in a more connected, climate‑resilient India.

Dec 19, 2025 – The Government announces a nationwide awareness drive for the soon‑to‑be‑enacted VB‑G RAM G scheme and notes that the Congress Working Committee will meet on Dec 27 to debate replacing MGNREGA. The new law guarantees 125 days of work and a 15‑day unemployment allowance payable by states, adopts a 60:40 centre‑state funding split (90:10 for Northeastern and Himalayan regions), and allows a 60‑day no‑work window to protect peak agricultural seasons[5].

Dec 21, 2025 – President Droupadi Murmu gives assent to the VB‑G Ram G Bill, formally repealing the Congress‑era MGNREGA. The act restructures the programme around four outcome‑focused pillars—water security, core rural infrastructure, livelihood‑related infrastructure, and extreme‑weather mitigation. Rural Development Minister Shivraj Singh Chouhan declares in a video that the reform is “a step forward from MGNREGA[4].

Dec 22, 2025 – The President signs the VB‑G RAM G Act, cementing the shift to a 125‑day guarantee and introducing centralized allocation powers. Critics warn that the new 60:40 funding model and discretionary centre control “erode state autonomy” and risk biasing fund distribution[3]. A separate analysis notes that only 7 % of rural households actually received the full 100 days in 2023‑24, highlighting a persistent delivery gap[1].

Dec 22, 2025 – The newly‑named G RAM G law (formerly MGNREGA) raises the guaranteed work to 125 days and retains an unemployment allowance for workers left idle for 15 days. Critics argue the reform “centralises control and converts a legal right into a discretionary program” and cite an international open letter warning that “dismantling the scheme would be a historic error[1][1]. Despite implementation challenges, economists report a 14 % earnings boost and a 26 % poverty reduction among beneficiaries[1].

Dec 23, 2025 – The President assents to the VB‑G RAM G Act 2025, framing it as a renewal rather than a demolition of MGNREGA. The legislation strengthens the unemployment guarantee, removes previous dis‑entitlement clauses, and preserves gram‑panchayat planning while keeping the 60:40 centre‑state cost‑share (with a 90:10 split for Northeastern, Himalayan states and Jammu & Kashmir)[2]. The article emphasizes that the reform “addresses past governance gaps” highlighted by earlier CAG reports and pandemic‑era migration spikes[2].

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