From MGNREGA to VB-G RAM G: A Paradigm Shift in Rural Employment Policy
Context
The Union government is set to introduce the Viksit Bharat — Guarantee For Rozgar and Ajeevika Mission (Gramin) Bill in the Lok Sabha, proposing to replace the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA), 2005. The move signals a structural shift in India’s rural employment framework, aligning it with the vision of Viksit Bharat @2047.
While the Bill promises expanded workdays and technological efficiency, it also raises concerns regarding federal balance, fiscal burden on States, and dilution of the rights-based approach that has defined rural employment policy for two decades.
MGNREGA: A Brief Recap
MGNREGA, enacted in 2005, was a rights-based, demand-driven welfare legislation that guaranteed:
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100 days of wage employment per rural household per year
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Legal entitlement to work, failing which unemployment allowance was payable
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Decentralised planning through Gram Panchayats
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Centre bearing 100% of unskilled labour wages and 75% of material costs
In practice, this translated into a 90:10 cost-sharing between Centre and States.
MGNREGA played a crucial role in:
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Reducing rural distress
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Providing livelihood security
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Creating durable rural assets
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Acting as an automatic stabiliser during economic shocks (e.g., COVID-19)
What Does the VB-G RAM G Bill Propose?
1. Shift from Demand-Driven to Supply-Driven Model
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MGNREGA: Employment generated based on demand from rural households
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VB-G RAM G: Employment capped by a fixed budget allocation, determined by the Union government
This marks a fundamental policy shift — from entitlement to allocation.
2. Centralised Budgetary Control
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The Union government will decide State-wise normative allocations
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Allocation will be based on “objective parameters”, yet to be specified
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Unlike MGNREGA, budgets cannot be expanded mid-year based on demand
๐ Implication: Reduced fiscal flexibility for States during distress years (droughts, migration surges, pandemics).
3. Selective Geographic Implementation
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The Centre will notify specific rural areas where the scheme will operate
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Unlike MGNREGA’s universal rural coverage, employment will be geographically restricted
๐ Implication: Risk of exclusion errors and uneven rural development.
4. Increase in Guaranteed Workdays
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Guaranteed workdays increased from 100 to 125 days
๐ While positive on paper, this benefit is contingent on budget caps, limiting real-world impact.
5. Increased Financial Burden on States
| Category | Cost Sharing (Centre : State) |
|---|---|
| NE & Himalayan States | 90 : 10 |
| Other States | 60 : 40 |
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State share rises from ~10% to 40%
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This comes at a time when many States already face fiscal stress
๐ Implication: Poorer States may reduce participation or struggle to implement the scheme effectively.
6. Pause During Peak Agricultural Seasons
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Programme may be temporarily paused during peak farming seasons to ensure labour availability for agriculture
๐ Concern: Undermines MGNREGA’s role as a livelihood safety net, especially for landless workers.
7. Legal Codification of Technology Use
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Aadhaar-linked attendance
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Mobile app-based work measurement
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Geo-tagging of worksites
Key Criticisms
Nikhil Dey (MKSS) and other civil society actors argue that:
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The Bill dilutes the rights-based character of MGNREGA
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Converts a legal guarantee into a discretionary welfare scheme
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Weakens decentralisation and State autonomy
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Centralises decision-making contrary to the spirit of cooperative federalism
Constitutional & Governance Concerns
Federalism
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Increased State expenditure with reduced decision-making power
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Potential violation of cooperative federalism
Social Justice
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Risk of exclusion of marginalised rural populations
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Shift from “right to work” to “availability of work”
Accountability
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Budget capping weakens grievance redressal
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No clarity on unemployment allowance provisions
Relevance for UPSC
Prelims
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Difference between demand-driven vs supply-driven schemes
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Cost-sharing patterns in Centrally Sponsored Schemes
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Role of technology in welfare delivery
Mains (GS II & III)
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Welfare state vs fiscal prudence
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Centre-State relations
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Rural employment and inclusive growth
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Rights-based legislation vs targeted delivery
Essay
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“Development with dignity”
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“Centralisation vs decentralisation in welfare governance”
Way Forward
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Retain the rights-based core while improving efficiency
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Clearly define allocation parameters and grievance mechanisms
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Ensure digital inclusion safeguards
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Balance national vision with local needs and federal autonomy
Conclusion
The VB-G RAM G Bill reflects a broader shift in governance philosophy — from entitlement to efficiency, from decentralisation to central control. While aligning rural employment with long-term development goals is essential, weakening a proven social safety net risks undermining livelihood security, federal balance, and social justice.
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