VB-G RAM G rules: What changes as the new job scheme replaces MGNREGS from July 1?
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Context
The Union government has released draft rules for the implementation of the new Viksit Bharat-Guarantee for Rozgar and Ajeevika Mission (Gramin) Act, 2025, which will replace the two-decade-old scheme from July 1. The new introduces significant changes, including an increase in guaranteed workdays, a shift in the funding burden towards states, and a top-down approach to resource allocation based on Finance Commission formulas.
UPSC Perspectives
Governance
The transition from to the represents a major shift in rural employment policy design. While it increases the guaranteed wage employment days from 100 to 125, it introduces a 60-day pause during peak agricultural seasons to ensure farm labour availability, addressing a long-standing concern of the agricultural sector. The introduction of performance-based incentives—where a portion of funds is tied to timely wage payments, compliance, and work completion—reflects a move towards outcome-oriented governance. However, the shift from a demand-driven model based on state labour budgets to a top-down normative allocation by the Centre alters the fundamental nature of the scheme. UPSC questions may explore how these changes balance the need for fiscal discipline and performance monitoring with the fundamental right to work and the demand-driven ethos of the original scheme.
Federalism
The new scheme has profound implications for fiscal federalism. Under , the Centre bore 100% of the wage bill. The mandates a 60:40 fund-sharing ratio between the Centre and most states (90:10 for Northeastern/Himalayan states). Furthermore, states must bear any expenditure exceeding their normative allocation. This significantly increases the fiscal burden on state exchequers. The use of the horizontal devolution recommendations of the to determine state allocations is another critical federal issue. This formula may result in lower allocations for better-performing states (like Tamil Nadu and Maharashtra) compared to their historical usage, while increasing shares for others (like UP and Bihar). Aspirants should analyze this in the context of cooperative federalism versus centralization of fiscal power, evaluating how such policy shifts impact state autonomy and resource management.
Economic
From an economic perspective, the modifies a crucial social safety net that provides counter-cyclical support during rural distress. The increased working days (125) aim to bolster rural incomes and aggregate demand. The mandate for (DBT) for all wages and unemployment allowances continues the push for financial inclusion and reducing leakages. However, the rule requiring states to fund excess demand could lead to the rationing of work if states lack the fiscal space, potentially undermining the 'guarantee' aspect of the scheme during economic downturns. The integration of existing job cards via ensures continuity, but the overarching shift towards state co-funding requires careful monitoring of rural wage trends and employment generation. Questions could focus on the macroeconomic impact of altering rural employment guarantees and the trade-offs between fiscal consolidation and welfare provision.