VB-G Ram G Bill, 2025: Key Provisions, Funding Pattern, and How It Will Replace MGNREGA in Rural India

Why in the news?

• The central government introduced the VB-G Ram G Bill, 2025 in the Lok Sabha.
• It aims to replace the MGNREGA Act, 2005 to overhaul the rural jobs scheme.

What is VB-G RAM G Bill:

• The Viksit Bharat-Guarantee for Rozgar and Ajeevika Mission (Gramin) Bill, 2025 or VB-G Ram G Bill, 2025 proposes a major overhaul of the existing MGNREGA.
• It aims to establish a modern statutory framework aligned with the vision of Viksit Bharat, 2047.
• It proposes to raise the number of guaranteed wage employment days in a financial year from 100 to 125.
• Along with this, the Bill suggests a few key changes in relation to guaranteed rural employment in India.

Key Provisions the VB- G Ram G Bill, 2025:

• Number of guaranteed wage employment days:
• Section 5 (1) of the VB-G Ram G Bill proposes 125 days of guaranteed employment to every rural household whose adult members volunteer to do unskilled manual work.
  • Under MGNREGA, Section 3(1) provides for “not less than one hundred days” work per rural household in a financial year. Also allowed additional 50 days of wage employment beyond the stipulated quota. For instance, every scheduled tribe household in a forest area is entitled to get 150 days’ work provided that such families have no other private property except the land rights granted under the Forest Rights Act, 2016.
  • Section 3(4) of MGNREGA provides additional 50 days of unskilled manual work in a year, over and above the 100-day limit in rural areas that are experiencing drought or any natural calamity.

• Centre to Share the burden of funding:
  • Another major change proposed is in the fund sharing pattern. Under MGNREGA, the Centre paid the entire wage bill. Under this new bill, states will have to share the wage payment burden.
    • The Centre has proposed the new funding pattern at a time when the fiscal space for several states has been gradually shrinking.
    • The implementation of GST and the Centre’s increasing focus on different kinds of Cess have constrained state’s revenue streams. 
    • The new formula is expected to put an additional annual fiscal burden of around Rs. 30,000 crore annually.
• Normative Allocation in place of Labour Budget:
  • The new bill has a Normative Allocation formula which transforms the method of allocation of resources into a purely top-down process. 
  • The allocation of funds will be done by the Central Government to the state.
    • Section 4(5) of the VB-G Ram G Bill states that the Central Government shall determine the state-wise normative allocation for each financial year. It will be based on objective parameters as may be prescribed by the Central Government.
    • Section 4(6) – any expenditure incurred by a state in excess of its normative allocation shall be borne by the state government in such manner and by such procedure as may be prescribed by the Central Government.
• Pause in Employment Guarantee during agricultural seasons:
  • As per Section 6(1), the VB-G Ram G Bill proposes provisions for pausing the employment guarantee scheme for 60 days during sowing and harvesting.
  • It is to ensure “adequate agricultural labour availability”.
  • States are to notify these 60-day period in advance. They may issue different notifications for different areas based on agro-climatic zones, local patterns of agricultural activities or other factors.
  • The provision for 60-day pause effectively results in a shorter window to avail of the 125-day scheme. 
  • Moreover, India has a diverse agriculture calendar with crops varying from one region to another.
• Viksit Gram Panchayat Plans:
  • All work under the new scheme shall originate from the Viksit Gram Panchayat plans consolidated at the block, district and state levels. It will be further aggregated into the Viksit Bharat National Rural Infrastructure Stack.
  • The Viksit Bharat National Rural Infrastructure Stack encompass four thematic domains –
    • Water security through water related work
    • Core rural infrastructure
    • Livelihood related infrastructure
    • Work for mitigation of extreme weather events
  • These plans will be integrated with the PM Gati Shakti National Master Plan.
• Gramin Rozgar Guarantee Cards:
  • The VB-G Ram G Bill provides for issuance of Gramin Rozgar Guarantee Cards to adult members of every rural household willing to undertake unskilled manual work.
  • Such persons can do their registration at their Gram Panchayat within whose jurisdiction they reside.
• Special Gramin Rozgar Guarantee Cards:
  • It also has provisions for the issuance of Special Gramin Rozgar Guarantee Cards to the following –
    • Single woman
    • Persons with disability
    • Person above sixty years
    • Released bonded labourers
    • Persons belonging to PVTGs
    • Transgender persons. 

This special card will have a distinct colour.

Proposed Funding Pattern under VB-G Ram G Bill:

• 90% by Centre and 10% by the States –
  • These cover Northeast and Himalayan states and UTs – Arunachal Pradesh, Assam, Himachal Pradesh, Jammu & Kashmir, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim, Tripura and Uttarakhand.
• 60% by Centre and 40% by the States –
  • This covers all other states and UTs with a legislature. These are – Andhra Pradesh, Bihar, Chhattisgarh, Goa, Gujarat, Haryana, Jharkhand, Karnataka, Kerala, Madhya Pradesh, Maharashtra, Odisha, Punjab, Rajasthan, Tamil Nadu, Telangana, Uttar Pradesh, West Bengal and Puducherry.
• 100% by Centre –
  • Four UTs without legislature. These are – Ladakh, Andaman and Nicobar, Dadra Nagar Haveli and Daman and Diu, and Lakshadweep.

Rationale Behind the Proposed Overhaul of MGNREGA:

• To begin with, the government argues that MGNREGA, enacted in 2005, no longer fully reflects present-day rural realities.
• Over time, declining poverty levels and wider digital access have altered the rural socio-economic landscape.
• However, despite these changes, the scheme continues to face structural challenges such as misuse of funds, weak monitoring mechanisms, and the creation of low-quality assets.
• In fact, during FY 2024-25, misappropriation under MGNREGA amounted to ₹193.67 crore.
• At the same time, only 7.61% of participating households were able to complete the full 100 days of guaranteed employment.
• Therefore, the proposed VB–G RAM G framework aims to replace the fragmented implementation model.
• Ultimately, it seeks to establish a more focused, accountable, and technology-driven rural employment system.

Conclusion:

The VB-G Ram G Bill, 2025 represents a decisive shift in India’s approach to rural employment and livelihood security. The VB-G Ram G Bill attempts to address long-standing challenges associated with MGNREGA, including fund misuse, weak monitoring, and limited asset quality. It also aims at expanding social inclusion through special Gramin Rozgar Guarantee Cards for vulnerable groups.

By proposing to replace the MGNREGA Act, 2005, the government seeks to realign the rural job guarantee framework with contemporary socio-economic realities, fiscal constraints, and the long-term vision of Viksit Bharat 2047. However, concerns related to reduced state autonomy, additional fiscal burden on states, and the effective implementation of a top-down allocation model remain critical areas for debate.

Overall, the VB-G Ram G Bill, 2025 marks a significant policy transition in India’s rural development landscape. Its success will ultimately depend on cooperative federalism, adequate financial support to states, and robust accountability mechanisms to ensure that the promise of guaranteed rural employment translates into sustainable livelihoods and resilient rural infrastructure.

Sources:

1. https://indianexpress.com/article/political-pulse/key-changes-vb-g-ram-g-bill-introduces-rural-job-guarantee-framework-10420806/
2. https://timesofindia.indiatimes.com/india/mgnrega-is-now-vbg-ram-g-what-it-is-and-how-its-different-key-faqs-answered/articleshow/125975849.cms