Telangana govt considering moving SC against VB G RAM G Act: Minister

Multiple state governments are considering filing a Supreme Court challenge against the Viksit Bharat – Guarantee for Rozgar and Ajeevika Mission (Gramin) Ac...

What Happened

Multiple state governments are considering filing a Supreme Court challenge against the Viksit Bharat – Guarantee for Rozgar and Ajeevika Mission (Gramin) Act, which replaces MGNREGA and comes into force from July 1, 2026.
A cabinet sub-committee in one southern state is exploring coordinated legal action with other state governments, with a final decision on whether to adopt the central framework or enact a state-level law due by July 2, 2026.
The core objections relate to the new 60:40 Centre–State funding pattern (replacing full Central wage funding under MGNREGA), centralised project approval mechanisms, and the allegation that states were not adequately consulted before the legislation was enacted.

Static Topic Bridges

MGNREGA and Its Constitutional Footing

The Mahatma Gandhi National Rural Employment Guarantee Act, 2005 created a statutory right to at least 100 days of unskilled wage employment per rural household per financial year. It is placed on the Concurrent List (Entry 23 — social security and social insurance; employment and unemployment), making both Parliament and State Legislatures competent to legislate. Under MGNREGA, wages were fully funded by the Centre, giving states implementation responsibility without corresponding fiscal exposure.

Enacted under: Article 41 (Directive Principle — right to work) and expanded by courts to connect with Article 21 (right to life and livelihood) via Olga Tellis v. Bombay Municipal Corporation (1985)
In Olga Tellis (1985), the Supreme Court held that the right to livelihood is an integral component of the right to life under Article 21, since a person cannot live without the means of sustenance
MGNREGA wages: 100% centrally funded; material costs shared 75:25 (Centre:State)
The Act is a "demand-driven" statute — the government is legally obliged to provide work within 15 days of a valid application, failing which an unemployment allowance must be paid

Connection to this news: Critics argue the VB-G RAM G Act shifts MGNREGA's justiciable right-to-work framework toward a discretionary, budget-capped programme, weakening workers' legal entitlement. State governments contend this restructuring was imposed without adequate federal consultation.

VB-G RAM G Act: Key Structural Changes

The Viksit Bharat – Guarantee for Rozgar and Ajeevika Mission (Gramin) Act, passed in Parliament in December 2025 (introduced December 16, passed December 18), replaces MGNREGA from July 1, 2026. Its full name references "Viksit Bharat" (Developed India), connecting it to the government's broader 2047 development vision.

Employment guarantee: Increased from 100 to 125 days per rural household per year
Funding pattern: 60:40 (Centre:State) for general category states; 90:10 for North-eastern and Himalayan states — a major departure from MGNREGA's full central wage funding
Agricultural pause: States may suspend work for up to 60 days during sowing and harvesting seasons (Sections 6(1) and 6(2))
Technology mandate: Biometric authentication, geospatial mapping, mobile dashboards, and weekly public disclosure required
Project approval: Integrated with PM Gati Shakti National Master Plan through a centralised digital platform
Oversight: National and State-level Steering Committees replace the earlier gram sabha-centred planning

Connection to this news: The 60:40 funding shift places significant new fiscal burdens on states, particularly those with high rural employment demand and stretched fiscal deficits. States with narrow fiscal space would bear proportionally higher costs while losing autonomy over project selection.

Federal Structure and Inter-State Council Mechanisms

India follows a quasi-federal structure where legislative powers are divided across three lists (Union, State, Concurrent) under Schedule VII of the Constitution. On Concurrent List subjects, Parliament's law prevails over a State law in cases of repugnancy (Article 254), unless the President gives assent to the State law. States arguing that the new Act violates the federal compact typically invoke the basic structure doctrine — the Supreme Court in Kesavananda Bharati v. State of Kerala (1973) held that federalism is part of the Constitution's basic structure.

Article 254(1): In case of conflict between Parliament and State law on a Concurrent subject, the Parliamentary law prevails
Article 254(2): A State law may prevail if it has received Presidential assent, even if it is repugnant to a Parliamentary law
Finance Commission (Article 280): Determines the vertical and horizontal sharing of central taxes; state concerns about unfunded mandates connect to Finance Commission devolution adequacy
Inter-State Council (Article 263): Constituted to facilitate coordination and resolve disputes between Centre and states; not routinely convened on legislative matters

Connection to this news: States considering Supreme Court challenges would need to establish that the Act violates either procedural constitutional norms or substantive rights. The key constitutional question is whether Parliament can redesign a Concurrent List scheme in a way that compels states to co-fund at rates that strain their fiscal capacity.

Key Facts & Data

VB-G RAM G Act replaces the Mahatma Gandhi National Rural Employment Guarantee Act, 2005 (MGNREGA)
New employment guarantee: 125 days per household per year (up from 100 days under MGNREGA)
Funding pattern: 60:40 (Centre:State) for most states; 90:10 for North-eastern and Himalayan states
MGNREGA wage funding was 100% central; the new Act introduces state co-funding of wages for the first time
Work suspension clause: Up to 60 days annually during agricultural seasons permitted under Sections 6(1) and 6(2)
The Bill was introduced and passed in the Lok Sabha within two days — December 16–18, 2025
Olga Tellis v. Bombay Municipal Corporation (1985): SC held right to livelihood is part of Article 21
Article 41 (DPSP): Directs the state to secure the right to work, education, and public assistance
Kesavananda Bharati v. State of Kerala (1973): Established federalism as part of the Constitution's basic structure
Bihar's state co-funding share under the new Act is estimated at approximately ₹2,576 crore, equivalent to ~0.23% of its GSDP