India Introduces New Rural Employment Law, VB-GRAMG, to Replace MGNREGA
Centre notifies VB-GRAMG; 125-day rural employment law to replace MGNREGA from July 1
Hindustan Times
Image: Hindustan Times
The Indian government has notified the Viksit Bharat - Guarantee for Rozgar and Ajeevika Mission (VB-GRAMG), replacing the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA). Effective from July 1, 2026, the new law guarantees 125 days of work per rural household and alters funding mechanisms between the Centre and states.
- 01VB-GRAMG will replace MGNREGA, increasing guaranteed workdays from 100 to 125.
- 02The law introduces a fixed spending ceiling for states, shifting funding responsibilities.
- 03A total annual outlay of approximately ₹1.51 lakh crore is estimated, with the Centre's share at ₹95,700 crore.
- 04The new law mandates direct employment for laborers, excluding private contractors.
- 05Stronger accountability measures include unemployment allowances and social audits.
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The Indian central government has officially notified the implementation of the Viksit Bharat - Guarantee for Rozgar and Ajeevika Mission (VB-GRAMG), set to replace the nearly two-decade-old Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) starting July 1, 2026. This new law guarantees eligible rural households 125 days of paid unskilled manual work per financial year, an increase of 25 days over the previous act. The funding mechanism will change significantly, as the Central government will establish a fixed annual spending ceiling for each state, shifting some financial responsibility to state governments. The total annual outlay for the program is estimated at approximately ₹1.51 lakh crore (roughly $182 billion USD), with the Centre's contribution projected at ₹95,700 crore (about $11.5 billion USD). The VB-GRAMG emphasizes direct employment, prohibiting private contractors and mandating that at least 60 paise of every rupee spent goes towards wages. Additionally, if a worker applies for work and is not provided with it within 15 days, the state must pay a daily unemployment allowance. The law also includes provisions for social audits and enhanced accountability measures.
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The introduction of VB-GRAMG is expected to provide more job opportunities for rural households, potentially improving their income and living standards. Additionally, the accountability measures may ensure that workers receive their entitled benefits more reliably.
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