The Central government has officially notified July 1, 2026, as the effective date for the implementation of the Viksit Bharat – Guarantee for Rozgar and Ajeevika Mission (Gramin) Act, 2025. This new legislation will replace the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA), 2005, which has been in effect since the UPA era. The repeal of MGNREGA will coincide with the enforcement of the new Act.
Key Features of the New Act
Under the VB–G RAM G framework, every rural household with adult members willing to perform unskilled manual work will be entitled to 125 days of wage employment per financial year, an increase from the 100 days provided under MGNREGA. The Ministry of Rural Development described this as a historic shift in India's rural development approach.
Union Minister Shivraj Singh Chouhan expressed confidence that the scheme will be a milestone in building developed villages as the foundation for a developed India. He noted that the formulation of rules for the new Act is ongoing, following consultations with states. The rules are expected to be finalized soon and will be put up for public consultation before July 1.
Funding and Implementation
The new Act will be implemented as a centrally sponsored scheme with a cost-sharing pattern of 60:40 between the Centre and states. For northeastern and Himalayan states, the ratio is 90:10, while Union Territories without legislatures will receive 100% central funding.
Chouhan assured a seamless transition, ensuring that no laborer is deprived of employment during the changeover. Ongoing MGNREGA works as of June 30 will be carried over into the new framework. All e-KYC verified MGNREGA job cards will remain valid under VB–G RAM G until Gramin Rozgar Guarantee Cards are issued. Currently, about 91% of around 12 crore active workers have been verified. Workers without job cards will not be denied employment solely due to pending e-KYC, and states will continue facilitation for e-KYC completion.
State Schemes and Budget Allocation
States have six months from the Act's commencement to formulate their schemes. A scheme template has already been shared with states, and many are expected to finalize their plans earlier than the six-month deadline.
For the financial year 2026-27, the central government has allocated Rs 95,692.31 crore, the highest-ever budget estimate for a rural employment program. Including state contributions, the total program outlay is expected to exceed Rs 1.51 lakh crore.
Political Reactions
The Congress party criticized the announcement, calling it a headline-grabbing exercise. Congress General Secretary Jairam Ramesh alleged that the new law offers extreme centralization and weakens the bargaining power of rural labor. He stated that the constitutional right to work and fair wages is being undermined. Ramesh shared a chart listing what he termed as attacks on the right to work, fair wages, panchayati raj, and state finances through the VB–G RAM G Act.
