Viksit Bharat–G RAM G Act to Rreplace MGNREGA from July 1 with record ₹95,692 crore allocation

THEBUSINESSBYTES BUREAU

NEW DELHI, MAY 11, 2026

In a landmark reform aimed at reshaping India’s rural development landscape, the Government of India on Monday notified the implementation of the Viksit Bharat – Guarantee for Rozgar and Ajeevika Mission (Gramin) [VB–G RAM G] Act, 2025, which will come into force across the country from July 1, 2026.

With the commencement of the new legislation, the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA), 2005 will stand repealed from the same date, marking what the government described as a historic transition towards a future-ready, productivity-driven and integrated rural transformation framework aligned with the vision of Viksit Bharat @2047.

Under the VB–G RAM G Act, every rural household whose adult members volunteer to undertake unskilled manual work will receive a statutory guarantee of 125 days of wage employment in a financial year, an increase aimed at strengthening livelihood security, enhancing rural incomes and accelerating sustainable village development.

The new framework also retains the legal safeguard for workers by ensuring that employment is provided within the prescribed timeframe after demand for work is raised. In case of failure, workers will continue to remain eligible for unemployment allowance under the provisions of the Act.

Emphasising transparency and accountability, the government said wages will continue to be transferred directly into workers’ bank or post office accounts through Direct Benefit Transfer (DBT). Payments are to be made weekly or within fifteen days from the closure of the muster roll, failing which workers will be entitled to delay compensation as provided under the Act.

For effective implementation of the programme, the Centre has earmarked ₹95,692.31 crore for the financial year 2026–27, the highest-ever Budget Estimate allocation for a rural employment programme in the country. Including the expected contribution from States, the total outlay is projected to cross ₹1.51 lakh crore, providing major impetus to rural infrastructure creation, employment generation and income enhancement.

The government assured that employment under MGNREGA will continue uninterrupted till June 30, ensuring a smooth transition to the new framework. Ongoing projects under MGNREGA will be seamlessly carried forward under VB–G RAM G while maintaining consistency with the provisions of the new law. The Centre reiterated that timely availability of work and prompt wage payment remain key priorities.

Adequate labour budget provisions have also been made available to States and Union Territories in line with demand patterns and field requirements to ensure that no eligible rural household faces inconvenience during the transition period.

The government further clarified that existing e-KYC verified MGNREGA Job Cards will remain valid under the new scheme until Gramin Rozgar Guarantee Cards are issued. Workers without Job Cards can continue to register at the Gram Panchayat level and no worker will be denied employment due to pending e-KYC formalities. State Governments will continue facilitation support for e-KYC completion at the grassroots level.

Meanwhile, the Ministry of Rural Development is preparing a series of draft rules under the VB–G RAM G Act, 2025 in consultation with States and Union Territories. These include rules related to normative allocation parameters, transitional provisions, steering committee structure, administrative expenditure, grievance redressal, wage and unemployment allowance payment procedures and expenditure-sharing mechanisms for Union Territories without legislatures.

The government said the Transitional Provisions Rules are expected to be published shortly to facilitate a smooth migration from MGNREGA to VB–G RAM G, while other draft rules will also be released soon for public consultation.

Describing Gram Panchayats as the central pillar of rural transformation, the government expressed confidence that the Viksit Bharat – G RAM G Act, 2025 would provide fresh momentum to employment generation, rural self-reliance and holistic development, emerging as a major milestone in building an empowered and prosperous rural Bharat.