VB-G RAM G And Rural Employment: A Shift From Rights-Based Welfare To Mission-Based Development?

Policy Update

Akshat Jangid

Background

On 21 December 2025, the President of India, Smt. Droupadi Murmu gave assent to the Viksit Bharat – Guarantee for Rozgar and Ajeevika Mission (Gramin) Bill, 2025, commonly referred to as VB-G RAM G. The legislation marks one of the most significant shifts in India’s rural employment policy since the enactment of the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA), 2005. While MGNREGA was built around a rights-based guarantee of wage employment, VB-G RAM G seeks to reframe rural employment through a broader approach to livelihoods, asset creation, and rural transformation.

MGNREGA had long served as a safety net for rural households by guaranteeing up to 100 days of wage employment to households whose adult members volunteered for unskilled manual work. Its importance was not limited to employment generation but also provided rural workers, especially women, landless labourers, small farmers, Scheduled Castes, Scheduled Tribes, and migrant-prone households, with a legal instrument to demand work during periods of unemployment or agricultural distress.

VB-G RAM G increases the statutory employment guarantee from 100 days to 125 days per rural household per financial year. The policy came into effect on 1 July 2026, with the transition from MGNREGA to the new framework expected to be implemented through existing rural employment records, ongoing works, job cards, and administrative systems. This makes VB-G RAM G not merely a new scheme but a restructuring of India’s rural employment architecture.

A shift from a rights-based welfare approach to a mission-based development model could change how rural employment is understood in practice. Under VB-G RAM G, if the focus shifts more toward asset creation and development targets, the challenge will be ensuring that workers’ legal rights are upheld.

The central policy question is whether VB-G RAM G can improve rural employment outcomes without weakening the core protective function that made MGNREGA significant.

Functioning

VB-G RAM G is designed to guarantee 125 days of wage employment in a financial year to eligible rural households whose adult members volunteer for unskilled manual work. The framework is expected to operate across rural India through close collaboration among state governments, district administrations, block-level officials, gram panchayats, and rural development institutions.

The policy also carries forward many features of the earlier rural employment framework. Existing e-KYC verified MGNREGA job cards are expected to remain valid until new Gramin Rozgar Guarantee Cards are issued. Ongoing works, existing assets, pending liabilities, records, and administrative obligations are also expected to be transitioned into the new framework. This continuity is crucial because a sudden break in job-card validity, payment records, or worksite approvals could result in exclusion of vulnerable workers.

A major shift under VB-G RAM G is its stronger focus on livelihood generation and rural asset creation. The scheme is expected to support works related to natural resource management, water availability, rural connectivity, community infrastructure, climate resilience, disaster preparedness, and livelihood-enhancing assets. This provides an opportunity to connect wage employment with long-term rural productivity.

However, this design also requires careful monitoring. Rural employment guarantees work best when they are driven by demand. If the programme becomes solely focused on meeting infrastructure targets, the immediate employment needs of rural households may be diluted. The challenge is to ensure that asset creation strengthens employment security rather than simply replacing it as the core objective.

Table 1: Differences in Policy Features

Performance

Since VB-G RAM G is a new framework, its long-term performance cannot yet be assessed independently. Therefore, the most appropriate way to examine performance is to use MGNREGA as a baseline and then assess whether VB-G RAM G addresses the earlier scheme’s limitations.

Figure 1: Work demanded and work availed (households in crore) 

Source: MGNREGA Dashboard, on December 29, 2025 

The demand for work has consistently exceeded the available work, indicating that the challenge for VB-G RAM G is not only to expand the legal guarantee but also to ensure that demand for work is effectively converted into actual employment.

One important baseline is the gap between legal promise and actual employment received. PRS Legislative Research notes that over the last decade, employment under MGNREGS averaged just about 48 days per household per year, and fewer than 10% of participating households completed 100 days of work. This raises an important question for VB-G RAM G: if the earlier 100-day guarantee was rarely fully realized, what administrative and fiscal reforms will ensure that the new 125-day guarantee becomes meaningful in practice?

The fiscal transition is equally important. VB-G RAM G has received an allocation of ₹95,692.31 crore for FY 2026-27, while MGNREGS has a reduced allocation during the transition year. The allocation appears substantial, but the key question is whether it is sufficient to support 125 days of employment if demand rises across rural India. The sustainability of the current allocation will depend on actual demand for work. If a large number of households begin claiming the full 125-day guarantee, fixed budgetary provisions may prove insufficient, leading to work rationing, delayed payments, or pressure on states. Employment guarantees cannot function only as legal promises; they require timely and predictable fund flows.

Figure 2: Fiscal Transition from MGNREGS to VB-G RAM G, FY 2024–25 to FY 2026–27

Source: PRS Legislative Research and PIB.

The figure highlights the fiscal transition from MGNREGS to VB-G RAM G. While the new allocation appears substantial, the expanded 125-day guarantee will require timely fund releases and demand-responsive budgeting to avoid under-provisioning of work.

MGNREGS person-days also provide a useful baseline. The Economic Survey records that person-days generated declined from 389.09 crore in FY 2020-21 to approximately 183.77 crore in FY 2025-26, up to 31 December 2025. The government has interpreted this decline partly as a reflection of improving rural economic conditions and reduced dependence on MGNREGS. However, the decline should be read carefully. Lower person-days may indicate better rural opportunities, but they may also reflect unmet demand, delayed payments, administrative rationing, or reduced work availability in some regions.

Figure 3: MGNREGS Person-Days Generated: Pandemic Peak vs FY 2025–26

Source note: Economic Survey 2025–26.

Figure 4: Women’s Participation in MGNREGS before VB-G RAM G

Source: PIB 

Another important performance indicator is women’s participation. Women’s participation under MGNREGS rose from 48% in FY 2013-14 to 58.1% in FY 2024-25 (a 10.1 percentage-point increase). This is a major achievement because rural women often face obstacles related to mobility, education, social norms, and limited access to formal employment. VB-G RAM G must preserve this gender-inclusive character.

Wage adequacy is another concern. In several states, average wages paid under rural employment work have been lower than the notified wage rates. This matters because employment security is weakened when workers receive fewer days of work or wages below expected levels.

Table 2: Gap between Notified Wage Rate and Average Wage Paid before VB-G RAM G (Selected States)

Source note: PRS Legislative Research

Impact

VB-G RAM G can have wide-ranging implications for rural households, women workers, small farmers, local governance, and climate-resilient development.

For rural workers, the increased guarantee of 125 days could provide stronger income security if implemented effectively. Rural households often face seasonal unemployment, irregular agricultural wages, climate shocks, and distress migration. A functioning employment guarantee can smooth household consumption and reduce dependence on informal borrowing.

For women, the scheme’s impact may be especially significant. MGNREGA became an important source of paid work for rural women because it provided local employment with equal wages. VB-G RAM G must ensure that women do not lose access during the transition to new cards, new digital systems, or revised work categories. Worksite facilities, safe locations, and predictable payments will be essential.

For small and marginal farmers, livelihood-linked works can improve local productivity if they support irrigation, soil conservation, water harvesting, drainage, land development, and the regeneration of common resources. If planned well, VB-G RAM G can connect wage employment with long-term rural resilience.

For gram panchayats, the programme can either strengthen local planning or create new administrative pressures. Rural employment works are most effective when they reflect local needs identified through gram sabhas. If implementation becomes centralized, the scheme may lose its local responsiveness.

For climate policy, VB-G RAM G creates an opportunity to align rural employment with adaptation. Works related to water conservation, flood protection, drought-proofing, afforestation, and common land development can help vulnerable districts respond to climate stress while generating local employment.

Emerging Issues

To begin with, VB-G RAM G must preserve the demand-driven character of rural employment. If workers cannot easily demand work, receive dated receipts, and claim unemployment allowance when work is not provided, the guarantee may become weaker in practice.

Second, fiscal adequacy will determine the credibility of the 125-day promise. A larger legal guarantee requires sufficient budget allocation, timely release of funds, and realistic state-wise planning.

Additionally, the transition from MGNREGA must not create exclusion. Existing workers should not lose access due to new cards, e-KYC errors, Aadhaar-linked payment failures, digital attendance issues, or administrative delays.

Fourth, the scheme raises federal concerns. Although VB-G RAM G provides a common national framework, outcomes may vary across states depending on administrative capacity, fiscal space, panchayat-level planning, digital infrastructure, and monitoring systems. States with weaker implementation capacity may face delays in work approval, leading to uneven access to the 125-day guarantee.

Moreover, wage adequacy and timely payment remain central. Even a stronger employment guarantee will not protect rural households if wages are delayed or paid below the notified levels.

Also, the balance between employment and asset creation must be maintained. Durable assets are important, but employment security should remain the core purpose.

Lastly, it is essential that the government go the extra mile by implementing systems that ensure full public transparency and accountability through social audits and public dashboards during the transition. 

Way Forward

To begin with, the legal right to demand work should be clearly preserved. VB-G RAM G must ensure that workers can demand employment and receive unemployment allowance if work is not provided within the prescribed period.

Additionally, the scheme should be backed by adequate, demand-responsive funding. Budgeting should be based on actual work demand, state-wise rural unemployment conditions, climate vulnerability, and historical employment patterns.

The transition should be worker-friendly. Existing job cards, pending wages, ongoing works, and worker records should remain protected until the new system is fully functional.

Gram panchayats must remain central to planning. Works should be selected through participatory gram sabhas and should reflect local livelihood, ecological, and infrastructure needs.

Moreover, a public dashboard should track work demanded, work provided, average employment days, women’s participation, SC/ST participation, wage payment delays, fund utilization, and completed assets. The scheme should prioritize climate-resilient assets, especially in drought-prone, flood-prone, and migration-prone districts.

Finally, an independent one-year transition review should be conducted to assess whether VB-G RAM G has improved employment security, reduced wage delays, protected vulnerable workers, and created durable rural assets.

Conclusion

VB-G RAM G represents a major attempt to restructure rural employment by connecting wage work with livelihood creation and rural transformation. However, its success will depend heavily on whether it preserves the rights-based, demand-driven, and inclusive character of MGNREGA while improving and expanding funding adequacy, wage payments, transparency, and the quality of rural assets. The transition should therefore be assessed not only by the number of days promised but also by the availability of timely and productive work.

References

Government of India. Economic Survey 2025–26: Rural Development and Social Progress. Ministry of Finance, 2026.

Government of India. The Mahatma Gandhi National Rural Employment Guarantee Act, 2005. Ministry of Law and Justice, 2005.

Ministry of Finance. “Rural Employment Scheme MGNREGS Reached Its Limits and Warranted Reassessment in Light of Evolving Rural Realities: Economic Survey.” Press Information Bureau, Government of India, 29 Jan. 2026.

Ministry of Rural Development. “President Gives Assent to Viksit Bharat—Guarantee for Rozgar and Ajeevika Mission (Gramin) (VB—G RAM G) Bill, 2025.” Press Information Bureau, Government of India, 21 Dec. 2025.

Ministry of Rural Development. “VB-G RAM G Act to Come into Force from July 1, 2026; ‘No Eligible Rural Worker Should Remain Without Work Even for a Day’: Shri Shivraj Singh Chouhan.” Press Information Bureau, Government of India, 30 June 2026.

Ministry of Rural Development. Mahatma Gandhi National Rural Employment Guarantee Act: Official Dashboard. Government of India, 2026.

PRS Legislative Research. Demand for Grants 2026–27 Analysis: Rural Development. Institute for Policy Research Studies, 4 Feb. 2026.

PRS Legislative Research. The Viksit Bharat – Guarantee for Rozgar and Ajeevika Mission (Gramin) (VB- G RAM G) Bill, 2025. Institute for Policy Research Studies, 2025.

About the Author

Akshat Jangid is an undergraduate Economics student from Rutgers University with an interest in public policy, rural development, governance, and evidence-based policy analysis. He is currently a Research & Editorial intern at IMPRI.

Reviewers: Pallavi and Harshini

Acknowledgements

The author gratefully acknowledges the reviewer(s) and IMPRI for providing their guidance, comments, and suggestions during the review and writing process.

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