India's Viksit Bharat-Guarantee for Rozgar and Ajeevika Mission (Gramin) Act, 2025, replaces the Mahatma Gandhi National Rural Employment Guarantee Act, introducing budget caps and requiring states to share 40% of costs. This change promises 125 days of work but raises concerns over funding shortfalls and uneven implementation. Karnataka is preparing a legal and political challenge, arguing it undermines rural social justice.
The VB-G RAM G Act marks a significant overhaul of India's rural employment framework, enacted in 2025 to succeed the MGNREGA, which had guaranteed 100 days of unskilled work annually since 2005. Under the new law, the scheme shifts from a demand-driven model—where the central government fully funded wages and most materials—to one with fixed annual allocations based on objective parameters. States must now cover 40% of all costs for general category regions, rising to 10% for hilly and north-eastern states, while any excess spending falls entirely on them.
In fiscal year 2024-25, MGNREGA expenditure totaled Rs 1,25,219 crore, serving 5.78 crore households for an average of 50 days each, though states contributed only about Rs 10,120 crore mainly for materials. Analysts estimate that under VB-G RAM G rules applied retrospectively, state spending on wages and materials alone would surge to Rs 41,494 crore, with wages accounting for over Rs 26,000 crore. Poorer states like Kerala, Jharkhand, and Tamil Nadu face the steepest increases, potentially straining budgets already committed to salaries and pensions.
Critics, including former Lok Sabha MP Adhir Ranjan Chowdhury, argue the Act breaches the republic's contract with the rural poor by capping provisions and removing Mahatma Gandhi's name, symbolizing a retreat from rights-based entitlements. "The renaming... is a declaration of political priority: Narratives of ideology... over substantive protection," Chowdhury wrote. Telangana anticipates an extra Rs 1,000-1,500 crore annually, while broader fears include reduced work opportunities and increased migration during distress.
The promise of 125 workdays could double expenditures to around Rs 2.5 lakh crore if demand rises, as seen during the Covid-19 pandemic when person-days jumped to 369 crore. Yet, without assured central funding hikes, states may limit access post-allocation. Karnataka's government, led by figures like Priyank Kharge, plans legal and political opposition, claiming the law erodes social justice. Experts like Avani Kapur note this reallocates fiscal risk to states amid high debt and moderate revenue growth, potentially crowding out health and education spending.
