Knowledge Nugget | VB-G RAM G comes into effect: What changes under India’s new rural employment scheme?

Key Takeaways:

The Union government has allocated Rs 95,692.31 crore for the VB-G RAM G scheme for this financial year (2026-27). Here are the key features of VB-G RAM G.

#1 Increased guaranteed wage employment days: The VB-G RAM G Act increases the number of working days from 100 to 125.

#2 Pause in employment guarantee during agriculture season: VB-G RAM G provides for a 60-day pause in the scheme during the peak agricultural sowing and harvesting seasons to ensure the availability of farm labour.

#3 States to share funding burden: Departing from MGNREGA, the VB–G RAM G Act proposes a higher share of states in the funding of the rural job programme. Unlike MGNREGS, where the Centre paid 100% of the wage bill, VB-G RAM G shifts 40% of the funding burden onto states. The exceptions to this are the northeastern and Himalayan states as well as Union Territories (UTs) with a legislature, where the Union government will bear 90% of the funding burden. As for UTs without a legislature, the Centre will bear the complete funding burden.

#4 Top-down resource allocation approach: It also flips the MGNREGS model of Central allocations based on state labour budgets, with the Centre now determining the devolutions.

#5 New rules: The Ministry of Rural Development on May 23 released eight draft rules that cover the VB-G RAM G scheme’s provisions regarding wage payment, unemployment allowances, allocations to states and implementation monitoring. These are the rules:

• National Level Steering Committee Rules

• Grievance Redressal Rules

• Administrative Expenses Rules

• Transitional Provisions under VB-G RAM G Rules

• Objective Parameters for Normative Allocation Rules

• Central Gramin Rozgar Guarantee Council Rules

• Manner of Payment of Wages and Unemployment Allowance Rules

• Manner and Procedure of Expenditure incurred by the State in excess of the Normative Allocation and Expenses of the Scheme for the UTs without Legislature Rules, 2026

#6 Gramin Rozgar Guarantee Card to replace job cards: Among the new rules, the Transitional Provisions are the most significant for existing MGNREGS workers. Their MGNREGS job cards, once renewed and verified through e-KYC, will remain valid for seeking employment under the VB-G RAM G Act. This arrangement will continue until state governments issue Gramin Rozgar Guarantee Cards under the new law.

— The VB-G RAM G provides for issuance of Gramin Rozgar Guarantee Cards to an adult member of every rural household willing to undertake unskilled manual work. Such persons may submit the names, ages and address of the household to the Gram Panchayat within whose jurisdiction they reside, for the purpose of registration under the new job guarantee scheme.

— It also has provisions for the issuance of Special Gramin Rozgar Guarantee Cards to single women, persons with disability, persons above sixty years; released bonded labourers; persons belonging to Particularly Vulnerable Tribal Groups; and transgender persons. The special card will have a distinct colour.

— The Gramin Rozgar Guarantee Card will be valid for three years, after which it may be renewed upon verification.

#7 Normative allocation to states: According to the draft Objective Parameters for Normative Allocation Rules, 2026: “The Central Government shall, for each financial year, determine the normative allocation of the funds, for every State, based on the objective parameters specified in these rules.”

— According to the rules, the Centre will use the Sixteenth Finance Commission’s horizontal devolution recommendations to determine the normative allocation to states.

#8 New Wage rates for Unskilled Manual Workers: The Centre has notified wage rates for unskilled manual workers under the VB-G RAM G Act, 2025. Notably, Section 10 of the VB-G RAM G Act empowers the Centre to specify the wage rate for unskilled manual work provided under the VB-G RAM G Scheme.

— As per the Act, the central government can notify different wage rates for different areas. The Act also mandates that the wage rate notified under the VB G RAM G law shall not be less than the prevailing wage rate as notified under Section 6 of the Mahatma Gandhi National Rural Employment Guarantee Act, 2005. 

— Daily wages have been fixed between Rs 300 and Rs 409 across states, with a special rate of Rs 450 in certain Gram Panchayats in Sikkim, as per a notification issued by the Union Ministry of Rural Development 

— Northern and northeastern states such as Arunachal Pradesh, Nagaland, Himachal Pradesh, Uttar Pradesh, Uttarakhand, Bihar, Jharkhand, Assam, Tripura, Sikkim and West Bengal have seen wage hikes of over 15 per cent.

— In contrast, southern states like Karnataka, Tamil Nadu, Andhra Pradesh and Telangana saw a hike of three per cent or below.

BEYOND THE NUGGET: Evolution of Rural Employment Programmes in India

1. Post Independence, various rural development policies in India have aimed to reduce poverty, increase farm productivity, and create jobs for surplus and underemployed rural workers. Wage employment programs have gradually become important tools for rural development while also strengthening basic infrastructure. 

2. From time to time various wage employment initiatives have been taken by the government beginning with early programmes such as the Rural Manpower Programme (1960s) and the Crash Scheme for Rural Employment (1971). 

3. These were followed by more structured efforts in the 1980s and 1990s, including the National Rural Employment Programme, Rural Landless Employment Guarantee Programme, later merged into Jawahar Rozgar Yojana (1993), which consolidated into Sampoorna Grameen Rozgar Yojana in 1999, aimed at improving coverage and coordination. 

4. A major shift came in wage employment policies with the Maharashtra Employment Guarantee Act of 1977, which introduced the concept of a statutory right to work. These experiences culminated in the enactment of the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) in 2005, providing a nationwide legal framework for rural employment generation.

Post Read Question

With reference to the Viksit Bharat – Guarantee for Rozgar and Ajeevika Mission (Gramin) (VB–G RAM G) scheme, consider the following statements:

1. It replaces the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS).

2. The scheme proposes a higher share of states in the funding of the rural job programme.

3. The horizontal devolution will be applicable for the Union Territories.

How many of the statements given above are correct?

(a) Only one

(b) Only two

(c) All three

(d) None

ANSWER KEY

(b)

(Sources: Daily wages set at Rs 300-450 under government’s new job scheme,   VB-G RAM G rules: What changes as the new job scheme replaces MGNREGS from July 1?, MGNREGA Revamp Explained)

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