Parliament Enacts VB-GRAMG Act Replacing MGNREGA
Why focus: Act replacing MGNREGA with 125-day target — Iron Law auto-include, core GS2 scheme trap for How-Many-Correct
In News
What Happened
Why It Matters
Background
History & Context
What Changed
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Guaranteed Days: Increased from 100 days under MGNREGA to 125 days per rural household annually under the VB-GRAMG Act.
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Funding Framework: Shifted from an open-ended 'demand-driven' model (where the central budget was legally required to expand to meet all work demands) to a 'normative allocation' framework (where funds are capped based on predefined criteria and historical utilization).
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Wage Cost Sharing: Under MGNREGA, the Centre bore 100 percent of the wage cost. Under VB-GRAMG, the wage cost is shared in a 60:40 ratio between the Centre and general category States (90:10 for special category states).
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Technological Mandate: The Aadhaar-Based Payment System (ABPS) and National Mobile Monitoring System (NMMS) for attendance are now statutory mandates explicitly written into the Act, whereas they were previously enforced via executive orders.
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Asset Creation Focus: The new Act includes strict statutory quotas requiring 60 percent of all works to be directly linked to climate resilience, groundwater recharge, and agricultural productivity, removing the previous flexibility Gram Panchayats had for general infrastructure.
What Did NOT Change
The core principle of providing manual, unskilled labor as a safety net for rural households remains intact. Gram Panchayats continue to be the primary implementing and planning agencies at the village level, retaining their statutory role in identifying works, holding Gram Sabhas, and issuing job cards.
Prelims Angle
NCERT Connection
Common Misconceptions
✗ The VB-GRAMG Act is fully funded by the Central Government just like MGNREGA for wage payments.
✓ Unlike MGNREGA which fully funded wages centrally (100:0), VB-GRAMG requires states to share the wage burden in a 60:40 ratio.
Because 100 percent central funding for wages was the defining, most famous feature of the original MGNREGA for nearly 20 years, making people assume the replacement law functions similarly.
✗ The new Act guarantees more employment because it is still an open-ended, demand-driven scheme.
✓ While days increased to 125, the scheme is now based on 'normative allocation', meaning total state budgets are capped based on formulas, effectively ending the open-ended legal entitlement.
The headline of '125 days' creates the illusion of an expanded entitlement, masking the fine print that overall funds are now capped.
Practice Questions
Q1
How Many CorrectConsider the following statements regarding the Viksit Bharat-Guarantee for Rozgar and Ajeevika Mission (Gramin) Act, 2025: 1. It guarantees 125 days of wage employment per rural household annually. 2. The Central Government bears 100 percent of the wage costs for unskilled manual labour. 3. It operates on a strict open-ended, demand-driven funding model. How many of the statements given above are correct?
Q2
Match the FollowingMatch List I (Scheme Characteristic) with List II (Associated Mechanism) regarding the transition from MGNREGA to VB-GRAMG: List I: A. Wage Funding under MGNREGA, B. Wage Funding under VB-GRAMG, C. Resource Model of MGNREGA, D. Resource Model of VB-GRAMG. List II: 1. 60:40 (Centre:State), 2. 100:0 (Centre:State), 3. Normative Allocation, 4. Demand-driven.
Q3
Assertion & ReasonAssertion (A): The enactment of the VB-GRAMG Act 2025 significantly increases the fiscal liability of state governments compared to the previous rural employment regime. Reason (R): The VB-GRAMG Act changes the Centre-State wage funding ratio for unskilled manual labour from 100:0 to 60:40 for general category states. Select the correct answer using the code given below: