Budget 2026 Sparks Concerns Over MGNREGA Dues and VB-G RAM G Act Funding
Social activist Nikhil Dey of the Mazdoor Kisan Shakti Sangathan (MKSS) has raised significant concerns regarding the Union Budget 2026-27, particularly focusing on the handling of the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) and the newly enacted VB-G RAM G Act. In a statement issued on Sunday, Dey emphasized that despite headline allocations, unresolved issues around liabilities, cost-sharing, guidelines, and timely payments could leave both state governments and rural workers in a state of uncertainty as state budgets are being finalized.
MGNREGA Allocation: Clearing Pending Liabilities Rather Than Funding Fresh Employment
Dey pointed out that the Rs 30,000 crore allocation for MGNREGA in the budget is unlikely to fund fresh employment opportunities. Instead, he argued that a substantial portion of this amount will be directed towards clearing pending liabilities. "There are already Rs 12,000 crore in pending payments, and with another two months of the current financial year remaining, most of this allocation will go towards winding up MGNREGA obligations," he stated. This situation is particularly acute for states like West Bengal, which have long-standing dues that remain unsettled.
VB-G RAM G Act: Unanswered Questions on State Preparedness and Financing
The budget has earmarked Rs 95,000 crore for the VB-G RAM G Act for the upcoming financial year, which matches the amount mentioned earlier in the financial memorandum when the law was passed. However, Dey highlighted a critical detail from that memorandum: it clearly stated that an additional Rs 55,000 crore would need to be contributed by states, bringing the total annual outlay to approximately Rs 1.5 lakh crore. This raises pressing questions about the financial burden on state governments.
Dey posed several unanswered questions regarding states' preparedness:
- What will the normative allocation be for states under the VB-G RAM G Act?
- When will this allocation be officially notified?
- How are states expected to mobilise such large sums of money to meet their share of the funding?
He added that with state budgets due this month, governments are left with little guidance on how much to allocate for the new scheme, creating confusion and potential shortfalls in planning.
Broader Implications: Uncertainty for Rural Workers and State Budgets
Dey concluded that the allocations announced for both the outgoing MGNREGA and the newly enacted VB-G RAM G Act have created more confusion than clarity. This lack of clear direction not only affects state governments as they finalize their budgets but also impacts rural workers who rely on these employment guarantee schemes for their livelihoods. The unresolved issues could lead to delays in payments and implementation, further exacerbating the challenges faced by vulnerable communities across India.
