Viksit Bharat- G RAM G Act, 2025: “Reforming MGNREGA for Viksit Bharat”

Viksit Bharat- G RAM G Act, 2025: “Reforming MGNREGA for Viksit Bharat”:

Introduction

Rural employment has been a cornerstone of India’s social protection framework for nearly two decades. Since its enactment in 2005, the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) played a key role in providing wage employment, stabilising rural incomes and creating basic infrastructure. Over time, however, the structure and objectives of rural India have evolved significantly. Rising incomes, expanded connectivity, widespread digital penetration and diversified livelihoods have altered the nature of rural employment needs.

Against this backdrop, the President of India has given assent to the Viksit Bharat-Guarantee for Rozgar and Ajeevika Mission (Gramin) (VB-G RAM G) Bill, 2025 marking a significant milestone in the transformation of rural employment policy. The Viksit Bharat-Guarantee for Rozgar and Ajeevika Mission (Gramin) (VB-G RAM G) Act, 2025 represents a comprehensive statutory overhaul of MGNREGA, aligning rural employment with the long-term vision of Viksit Bharat 2047, while strengthening accountability, infrastructure outcomes and income security.

Background of Rural Employment and Development Policy in India

Since Independence, rural development policies in India have focused on reducing poverty, improving agricultural productivity, and creating employment for surplus and underemployed rural labour. Wage employment programmes have gradually evolved as key instruments for supporting rural livelihoods while also strengthening basic infrastructure, with approaches adapting to changing socio-economic conditions over time.

• India’s wage employment initiatives progressed through multiple phases, beginning with early programmes such as the Rural Manpower Programme (1960s) and the Crash Scheme for Rural Employment (1971).
• 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.
• Complementary schemes such as the Employment Assurance Scheme and the Food for Work Programme addressed seasonal unemployment and food security.
• A major shift came 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.

MGNREGA Evolution and the Limits of Incremental Reform

• The Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) was a flagship programme aimed at enhancing livelihood security by providing at least 100 days of guaranteed wage employment each year to rural households willing to undertake unskilled manual work.
• Over the years, a range of administrative and technological reforms strengthened its implementation, leading to notable improvements in participation, transparency, and digital governance.
• Women’s participation rose steadily from 48 per cent to 58.15 per cent between FY 2013-14 and FY 2025-26, Aadhaar seeding expanded sharply, the Aadhaar-Based Payment System was widely adopted, and electronic wage payments became nearly universal. Monitoring of works also improved, with a large expansion in geo-tagged assets and a growing share of individual assets created at the household level.
• The experience under MGNREGA also highlighted the critical role played by field-level staff, who ensured continuity and scale of implementation despite working with limited administrative resources and staffing. However, alongside these gains, deeper structural issues persisted.
• Monitoring across several states revealed gaps such as work not found on the ground, expenditure not matching physical progress, use of machines in labour-intensive works, and frequent bypassing of digital attendance systems.
• Over time, misappropriation accumulated, and only a small proportion of households were able to complete the full one hundred days of employment in the post pandemic period. These trends indicated that while delivery systems improved, the overall architecture of MGNREGA had reached its limits.

The Viksit Bharat Guarantee for Rozgar and Ajeevika Mission Gramin Act responds to this experience through a comprehensive legislative reset. It strengthens the implementation framework by increasing the administrative expenditure ceiling from 6 per cent to 9 per cent, providing greater support for staffing, remuneration, training, and technical capacity. This shift reflects a practical and people-centred approach to programme management, moving towards a more professional and adequately supported system. Stronger administrative capacity is expected to improve planning and execution, enhance service delivery, and reinforce accountability, ensuring that the objectives of the new framework are achieved consistently at the village level.

Rationale for a New Statutory Framework:

• The need for reform is also rooted in broader socio-economic changes.
• MGNREGA was built in 2005, but rural India has transformed. Poverty levels declined from 27.1 per cent in 2011-12 to 5.3 per cent in 2022-23, supported by rising consumption, improved financial access, and expanded welfare coverage.
• With rural livelihoods becoming more diversified and digitally integrated, the open-ended and demand-driven design of MGNREGA no longer aligns fully with contemporary rural realities.
• The Viksit Bharat- G RAM G Act, 2025 responds to this context by modernising rural employment guarantees, strengthening accountability, and aligning employment creation with long term infrastructure and climate resilience goals.

Key Features of the Viksit Bharat- G RAM G Act, 2025:                                    

• The Act guarantees 125 days of wage employment per rural household in each financial year to such rural households whose adult members volunteer to undertake unskilled manual work, contributing to income security beyond the earlier 100-day entitlement, with an aggregated 60-day no-work period to ensure the availability of agricultural labour during peak sowing and harvesting season.
• Workers continue to receive 125 guaranteed days of employment within the remaining 305 days, ensuring that both farmers and labourers benefit. 
• The disbursement of daily wages shall be made on a weekly basis or, in any case, not later than a fortnight after the date on which such work was done.
• Employment creation is integrated with infrastructure development through four priority verticals:
  • Water security through water-related works
  • Core-rural infrastructure
  • Livelihood- related infrastructure
  • Special works to mitigate extreme weather events

• All assets created are aggregated into the Viksit Bharat National Rural Infrastructure Stack, ensuring a unified, coordinated national development strategy.
• Planning is decentralised through Viksit Gram Panchayat Plans, which are prepared locally and spatially integrated with national systems such as PM Gati Shakti.

MGNREGA vs VIKSIT BHARAT- G RAM G Act, 2025:

The new Act represents a major upgrade over MGNREGA, fixing structural weaknesses while enhancing employment, transparency, planning, and accountability.

The Financial Architecture:

• The shift from a central sector scheme to a centrally sponsored framework reflects the inherently local nature of rural employment and asset creation.
• Under the new architecture, states share both cost and responsibility through a normative allocation framework, creating stronger incentives for effective implementation and preventing misuse.
• Planning is grounded in regional realities through Gram Panchayat Plans. At the same time, the Centre continues to set standards, while states execute with accountability, resulting in a cooperative partnership that improves efficiency and strengthens outcomes.
• The total estimated annual requirement of funds on wage, material, and administrative components is Rs.1,51,282 crore, including the State share. Of this, the estimated Central share is Rs.95,692.31 crore. This transition does not impose an undue financial burden on states.
• The funding structure is calibrated to state capacity, with a standard cost-sharing ratio of 60:40 between the Centre and states, enhanced support of 90:10 for North Eastern and Himalayan states, and 100 per cent central funding for Union Territories without legislatures.
• States were already bearing a share of material and administrative costs under the earlier framework, and the move to predictable normative allocations further supports sound budgeting.
• Provisions for additional assistance to states during disasters and stronger oversight mechanisms also help reduce long term losses arising from misappropriation, reinforcing fiscal sustainability alongside accountability.

Benefits of the Viksit Bharat- G RAM G Act:

• The Act strengthens the rural economy by linking employment generation with productive asset creation, leading to higher household incomes and improved resilience.
• Priority is given to water-related works, supporting agriculture and groundwater recharge. Investment in core rural infrastructure, such as roads and connectivity, improves market access, while livelihood infrastructure, including storage, markets, and production assets, enables income diversification.
• Climate resilience is strengthened through works focused on water harvesting, flood drainage, and soil conservation.
• The guarantee of 125 days of employment raises household earnings, stimulates village-level consumption, and helps reduce distress-driven migration, supported by digital attendance, wage payments, and data-driven planning.

• Farmers benefit from assured labour availability through state-notified pauses in public works during peak sowing and harvesting seasons, prevention of wage inflation, and improved irrigation, storage, and connectivity.
• Labourers gain from higher potential earnings, predictable work through Viksit Gram Panchayat Plans, secure digital wage payments, direct benefits from the assets they help create, and a mandatory unemployment allowance.
• Where work is not provided, a daily unemployment allowance becomes payable after 15 days, with liability resting on the States.
• The rates and conditions are to be prescribed through rules, ensuring flexibility while safeguarding workers’ rights and promoting the timely provision of employment.

Implementing and Monitoring Authorities:

The Act establishes a clear institutional framework to ensure coordinated, accountable, and transparent implementation of the Mission across national, State, district, block, and village levels.

• Central and State Gramin Rozgar Guarantee Councils provide policy guidance, review implementation, and strengthen accountability.
• National and State Steering Committees drive strategic direction, convergence, and performance review.
• Panchayati Raj Institutions lead planning and execution, with Gram Panchayats implementing at least half of the works in terms of cost.
• District Programme Coordinators and Programme Officers manage planning, compliance, payments, and social audits.
• Gram Sabhas play a strengthened role in conducting social audits and ensuring transparency through access to all records.

Transparency, Accountability, and Social Protection:

• The Act equips the Central Government with clear enforcement powers to ensure compliance and protect public funds.
• It authorises the Centre to investigate complaints relating to implementation, suspend fund releases where serious irregularities are detected, and direct corrective or remedial measures to address deficiencies.
• These provisions strengthen accountability across the system, maintain financial discipline, and enable timely intervention to prevent misuse.

• The Act also establishes a comprehensive transparency framework covering every stage of implementation.
• It enables the use of artificial intelligence and biometric authentication to identify irregularities early, supported by Central and State Steering Committees that provide continuous guidance and coordination.
• A focused approach through four clearly defined rural development verticals allows closer tracking of outcomes.
• Panchayats are assigned an enhanced role in supervision, complemented by GPS and mobile-based monitoring of works in real time.
• Real-time MIS dashboards and weekly public disclosures ensure public visibility, while social audits mandated at least once every six months reinforce community participation and trust.

Conclusion:

The Viksit Bharat- Guarantee for Rozgar and Ajeevika Mission (Gramin) Act, 2025, represents a decisive shift in India’s rural employment policy. While MGNREGA achieved significant gains in participation, digitisation, and transparency over time, persistent structural weaknesses limited its effectiveness. The new Act builds on past improvements while addressing their shortcomings through a modern, accountable, and infrastructure-focused framework.

By expanding guaranteed employment, aligning work with national development priorities, and embedding strong digital governance, the Act repositions rural employment as a strategic instrument for sustainable growth and resilient livelihoods, fully aligned with the vision of Viksit Bharat 2047.