New rural job scheme VB-G RAM-G pays 10% more than MGNREGA

What Happened

• The Viksit Bharat – Guarantee for Rozgar and Ajeevika Mission (Gramin) Act, 2025 (VB-G RAM G) came into force on July 1, 2026, replacing the Mahatma Gandhi National Rural Employment Guarantee Act, 2005 (MGNREGA) across all rural areas of the country.
• The new law raises the statutory employment guarantee from 100 days to 125 days per rural household per financial year, and introduces a mandatory national floor wage of ₹300 per day.
• The national average daily wage under the new scheme is ₹327.4, compared to ₹298.8 under MGNREGA — a hike of over 10 per cent.
• 21 states and Union Territories that previously had notified wages below ₹300 under MGNREGA have been brought up to the new floor, while states with higher existing rates see only marginal revisions.
• The highest wage rate has been notified at ₹409 per day for Haryana, followed by Goa at ₹406 and Kerala at ₹401; Telangana has been notified at ₹308 per day.
• The Central Government released ₹95,692 crore as an initial financial allocation to ensure uninterrupted implementation from day one.

Static Topic Bridges

Mahatma Gandhi National Rural Employment Guarantee Act, 2005

MGNREGA, enacted under the United Progressive Alliance government in 2005, was one of the largest rights-based social protection schemes in the world. It gave a statutory legal guarantee — not merely a policy promise — of 100 days of wage employment per financial year to every rural household whose adult members were willing to do unskilled manual work. Wages were required to be disbursed within 15 days of work completion; if work was not provided within 15 days of application, an unemployment allowance became payable by the state government. The Act mandated a minimum 60:40 wage-to-material expenditure ratio to maximise employment generation. Wage rates were notified annually by the Central Government under Section 6(1), indexed to the Consumer Price Index for Agricultural Labourers (CPI-AL) with 2009 as the base year, leading to significant interstate disparities — rates ranged from ₹241 in Nagaland to ₹400 in Haryana in FY 2025-26.

VB-G RAM G Act, 2025 — Structural Reforms

The Viksit Bharat – Guarantee for Rozgar and Ajeevika Mission (Gramin) Act, 2025 was passed by Parliament on December 18–19, 2025, and received Presidential assent on December 20, 2025. Beyond the wage and days increase, the Act introduces structural reforms to address longstanding criticisms of MGNREGA — delayed wages, poor asset quality, and inadequate planning. It mandates Viksit Gram Panchayat Plans (VGPPs) — village-level development plans — that integrate rural employment works into a national rural infrastructure planning system. The Act also expands administrative expenditure limits, mandates technology-based monitoring, social audits, and public disclosure at the gram panchayat level. Wage rates continue to be indexed to CPI-AL and revised annually on April 1.

CPI-AL Indexation and Interstate Wage Disparities

The Consumer Price Index for Agricultural Labourers (CPI-AL), compiled by the Labour Bureau under the Ministry of Labour and Employment, is the benchmark used to revise rural employment wages annually. Because agricultural wage costs vary significantly across regions, CPI-AL indexation produces large interstate gaps in notified rates. Under MGNREGA, in FY 2025-26, the gap between the lowest (Nagaland, ₹241) and highest (Haryana, ₹400) state was ₹159 per day. The new VB-G RAM G floor of ₹300 compresses the bottom of the distribution by bringing 21 states up to a uniform minimum, though the index-linked system for higher-wage states continues.

Wage Employment as a Right vs. Policy Programme

A distinguishing feature of both MGNREGA and its successor VB-G RAM G is that employment is guaranteed as a statutory legal right — not a discretionary government scheme. A rural adult who demands work and is willing to do unskilled manual work cannot be denied employment beyond the statutory window (15 days), after which an unemployment allowance becomes a legal obligation. This rights-based design contrasts with schemes under Articles 38 and 43 of the Directive Principles (DPSP) — which direct the state to secure adequate means of livelihood and a living wage — but are non-justiciable. MGNREGA and VB-G RAM G, by statute, convert these DPSP aspirations into enforceable entitlements.

Key Facts & Data

• VB-G RAM G Act passed by Parliament: December 18–19, 2025; Presidential assent December 20, 2025
• Effective date: July 1, 2026 (Central Government notification)
• Employment guarantee: 125 days/household/year (up from 100 days under MGNREGA)
• National floor wage: ₹300/day (no state can notify below this)
• National average wage: ₹327.4/day (up from ₹298.8 — over 10% increase)
• States/UTs brought up to the floor: 21 (previously below ₹300 under MGNREGA)
• Highest state wage: Haryana ₹409/day; Goa ₹406/day; Kerala ₹401/day; Telangana ₹308/day
• Initial Central allocation: ₹95,692 crore
• Unemployment allowance: ≥¼ of notified wage (first 30 days); ≥½ of notified wage (remaining year) — payable by state
• Wage indexation: CPI-AL (Labour Bureau), revised annually on April 1
• MGNREGA replaced: Mahatma Gandhi National Rural Employment Guarantee Act, 2005 (42 of 2005)