President Murmu gives nod to VB-G RAM G Bill, replaces MGNREGA with new rural employment law

President Droupadi Murmu has given her assent to the Viksit Bharat—Guarantee for Rozgar and Ajeevika Mission (Gramin) (VB-G RAM G) Bill, 2025, formally paving the way for a comprehensive restructuring of India’s flagship rural employment programme.

With the President’s approval, the nearly two-decade-old Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) stands repealed and replaced by a new statutory framework aligned with the government’s long-term Viksit Bharat 2047 vision.

One of the most significant changes introduced under the new law is the enhancement of the statutory employment guarantee from 100 days to 125 days per financial year for rural households. The government has projected this as an expansion of entitlements, noting that the earlier 100-day provision had, in practice, often functioned as a rigid cap rather than a minimum guarantee.

The VB-G RAM G Act also marks a major shift in the programme’s funding architecture. Unlike MGNREGA, where the wage component was fully financed by the Centre, the new framework mandates shared financial responsibility between the Centre and the states.

Under the revised arrangement, funding will follow a 60:40 Centre–State ratio across the country. This replaces the earlier differentiated patterns, including 90:10 for northeastern and Himalayan states and 75:25 for other states. The government has argued that the uniform funding formula will strengthen cooperative federalism and encourage greater state-level ownership of implementation and outcomes.

Another notable provision allows for the temporary suspension of employment for up to 60 days during peak sowing and harvesting seasons. According to the government, this measure aims to ensure adequate farm labour availability and address long-standing concerns of farmers regarding labour shortages during critical agricultural periods.

The new law also narrows the scope of permissible works. Employment under VB-G RAM G will now be restricted to four core verticals—water security, core rural infrastructure, livelihood-linked assets, and climate resilience. The government has stated that this focused approach is intended to enhance the quality, durability, and long-term utility of assets created under the scheme.

The overhaul of the rural employment framework marks one of the most significant policy shifts in social welfare legislation in recent years, with implications for rural livelihoods, state finances, and centre–state relations.