First instalment of ₹25,863 crore under VB-GRAM G released
The Union Ministry of Rural Development released the first instalment — termed the "Mother Sanction" — of ₹25,863 crore to states and Union Territories for rolling out the Viksit Bharat–Guarantee for Rozgar and Aajeevika Mission (Gramin), or VB-G RAM G.
The funds were disbursed at a national video conference attended by Rural Development Ministers of all states and UTs; the release marks the scheme's formal operational commencement from July 1, 2026, when it replaced MGNREGA.
Uttar Pradesh received the largest single allocation at ₹3,210.76 crore, followed by Andhra Pradesh, Rajasthan, and Tamil Nadu; Kerala received ₹925.33 crore.
The scheme guarantees 125 days of wage employment per rural household annually — 25 days more than MGNREGA's 100-day entitlement — with a notified floor wage of ₹300 per day.
Under the new cost-sharing structure, states bear 40% of expenditure (compared to a lower Centre-dominant share under MGNREGA), raising concerns about fiscal pressure on high-demand states.
Gram Sabhas and Gram Panchayats are mandated to select permissible development works based on local needs, covering water conservation, village roads, culverts, school and anganwadi buildings, and farm-linked infrastructure for Self-Help Groups and Farmer Producer Organisations.
MGNREGA (2005) — The Framework Being Replaced
The Mahatma Gandhi National Rural Employment Guarantee Act, 2005 (enacted 23 August 2005, operative from February 2006) was India's flagship rights-based wage employment law. It gave every rural household a legal guarantee of 100 days of unskilled manual work per financial year, with employment to be provided within 5 km of the applicant's residence. If work was not provided within 15 days of application, the household was entitled to an unemployment allowance. Women were guaranteed at least one-third of jobs under the scheme. MGNREGA was significant because it converted the "right to work" from a Directive Principle into an enforceable statutory right.
Key Details
- Enacted under: UPA government, 2005; operational from February 2006.
- Employment guarantee: 100 days/household/year of unskilled manual work.
- Unemployment allowance payable if work not provided within 15 days.
- Women's quota: minimum one-third of MGNREGA employment.
- Asset creation mandate: roads, canals, ponds, wells — durable rural assets.
VB-G RAM G replaces MGNREGA from July 1, 2026, raising the employment guarantee to 125 days and the minimum daily wage to ₹300, but shifting significant fiscal burden to states and adding a stronger asset-creation and livelihood focus.
Fiscal Federalism and Cost-Sharing in Centrally Sponsored Schemes
Centrally Sponsored Schemes (CSS) are funded through a formula-based centre-state cost share. Historically, MGNREGA was a predominantly Centre-funded scheme (Centre bore ~100% of wage costs). A shift to a 60:40 Centre-State funding ratio (as under VB-G RAM G) significantly alters fiscal federalism dynamics: states with large rural workforces — such as UP, Bihar, MP — must now budget substantially more, while high-income states with smaller rural populations face a lower absolute burden. The Finance Commission (currently the 16th FC, constituted under Article 280) recommends the devolution of taxes, but CSS contributions come from the Union's own budget, not devolution.
Key Details
- VB-G RAM G cost share: Centre 60% — State 40% (compared to near-100% Centre share on wages under MGNREGA).
- Article 280: Finance Commission is constituted every five years to recommend tax devolution and grants.
- High wage-demand states face the steepest fiscal impact from the new cost-sharing norm.
The state-wise allocation differences (UP ₹3,210 cr vs. Kerala ₹925 cr) reflect both population and employment-demand weightage, but the 40% state co-financing obligation will test the fiscal capacity of poorer, high-demand states most.
Gram Sabha as a Constitutional Institution
The Gram Sabha is constituted under Article 243(b) of the Constitution (inserted by the 73rd Constitutional Amendment, 1992) as the foundational unit of rural self-governance. It comprises all registered voters of a village and holds powers as the State legislature may specify. Under MGNREGA and now VB-G RAM G, the Gram Sabha plays a central role in planning works and conducting social audits — making it the core accountability mechanism for rural employment schemes.
Key Details
- Defined under: Article 243(b), Constitution of India (73rd Amendment, 1992).
- Role: planning, approval, and social audit of public works in the village.
- Social audit under VB-G RAM G: Gram Sabhas select works, reducing top-down imposition.
The scheme explicitly mandates Gram Sabhas and Gram Panchayats to select development works, which aligns with the participatory development model embedded in Part IX of the Constitution.
Technological Barriers and Centralised Planning Concerns
Critics of VB-G RAM G have noted two structural concerns: (a) the platform's heavy technological interface (digital attendance, online job cards, geo-tagged asset registers) creates barriers for semi-literate or digitally excluded workers; and (b) the shift from demand-driven employment (a legal right under MGNREGA) to a more supply-side, asset-creation framework risks diluting the entitlement character of rural employment. Both concerns are relevant in the Mains context of welfare scheme design, rights versus schemes debate, and digital exclusion.
Key Details
- MGNREGA was demand-driven: any adult who applied was entitled to work.
- VB-G RAM G emphasises asset quality and livelihood creation, potentially reducing pure employment-on-demand.
- Digital infrastructure requirements may exclude the most marginalised.
The article explicitly flags "concerns over centralised planning and high technological barrier" as persistent critiques accompanying the first instalment release.
- Scheme name: Viksit Bharat–Guarantee for Rozgar and Aajeevika Mission (Gramin) — VB-G RAM G.
- Effective date of MGNREGA replacement: July 1, 2026.
- First instalment released: ₹25,863 crore ("Mother Sanction").
- Employment guarantee under VB-G RAM G: 125 days/household/year (vs. 100 days under MGNREGA).
- Notified daily floor wage: ₹300 (21 states/UTs brought up from below ₹300).
- Centre-State cost share: 60:40 (a major shift from near-100% Centre share on wages under MGNREGA).
- Largest state allocation: Uttar Pradesh — ₹3,210.76 crore.
- Smallest allocation among major states cited: Kerala — ₹925.33 crore.
- MGNREGA enacted: August 23, 2005; operative from February 2006.
- 73rd Constitutional Amendment (1992) — inserted Part IX (Panchayati Raj) and Article 243(b) defining Gram Sabha.