MNREGA to Be Replaced? Key Changes Proposed in VB–G RAMG Bill 2025

The government is preparing to make major changes to the rural employment system. Through the Vikas Bharat–Guarantee for Rozgar and Ajeevika Mission (Gramin) Bill, 2025, the government proposes to replace the nearly 20-year-old MNREGA (MNREGA, 2005).

While the government describes it as a modern and technology-based framework for rural employment and livelihoods, many experts and states believe it could increase the financial and administrative burden on state governments, posing a concern for the federal system.

What major changes are proposed in the VB–G RAMG Bill?

This bill makes fundamental changes to the rural employment guarantee system. The most important changes are explained in simple terms below.

1. Increase in employment days

• Now a 125-day guarantee
• MNREGA had a provision to provide at least 100 days of employment to every rural household.
• In the new bill, this has been increased to 125 days per financial year.
• Although the law provided flexibility in MNREGA, 100 days were considered the maximum due to technical limitations.
• The VB–G RAM G Bill makes 125 days a direct right, not an exception for special circumstances.

2. Major Change in the Center-State Funding Pattern

• States will now also bear the burden of wages in MNREGA - previously the central government bore 100% of the cost of unskilled labor.

New Formula in the VB–G RAM G Bill:

• 90:10 – Northeastern States, Himalayan States, and some Union Territories
• 60:40 – All Other States
• 100% Center – Union Territories without Legislative Assemblies
• This change will increase the direct financial pressure on states, which was not the case previously.

3. “Normative Allocation” Replacing the Labor Budget

• States used to prepare a labor budget every year and submit it to the center.
• Funds were received based on needs.
• The central government will set a pre-determined limit (normative allocation) for each state.
• Any expenditure exceeding the set limit will be borne by the state government.

4. Work ban during peak farming season

• No government work will be conducted during sowing and harvesting.
• Each state will have to declare a total of 60 days in advance per year.
• This period may vary by district, block, or panchayat.
• There may be no shortage of laborers in the fields, but this may reduce the practical scope of the 125-day guarantee.

5. Developed Gram Panchayat Plan and National Infrastructure Stack

• Now all work will be done through the Panchayat Plan.
• All work will begin with the developed Gram Panchayat Plan.
• These plans will be linked upwards: Gram Panchayat → Block → District → State
• All of these will be combined to form the Viksit Bharat National Rural Infrastructure Stack

It will cover four key areas:

• Water conservation
• Rural infrastructure
• Livelihood-related work
• Weather disaster protection

Why does the government want to change MNREGA?

• MNREGA was designed based on the circumstances of 2005.
• Now, digital access has increased in rural India and poverty has decreased.
• ₹193.67 crore misappropriation in 2024–25
• Only 7.61% of households received the full 100 days of work
• Greater accountability
• Technology-based monitoring
• Will focus on better quality assets.

What will be the impact on the rural economy?

• Rural employment will be strengthened.
• Village infrastructure will improve.
• Migration will decrease.
• Transparency will increase.
• Work and payment will be available on time.

What benefits will farmers receive?

• Laborers will be readily available during sowing and harvesting.
• Wage rates will not increase unnecessarily.
• Better irrigation and water conservation facilities.
• Roads, markets, and storage facilities will reduce crop losses.

What will rural laborers receive?

• 125 days of employment instead of 100.
• Digital payments linked to Aadhaar.
• Mandatory unemployment allowance if work is not available.
• Construction of durable assets in the village.
• Pre-determined work plans at the Panchayat level.
• Accountability and monitoring will be strict.
• AI-based fraud detection system.
• Work monitored through GPS and mobile phones.
• Public data every week.
• Social audits twice a year.
• Monitoring committees at the central and state levels.

Also Read - VB-G Ram G Bill 2025: 5 Big Changes That Will Replace MGNREGA