Centre notifies minimum wage ₹300/day under VB-G RAM G

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 Nat...

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 (MGNREGA) of 2005.
The Centre notified a national interim base wage floor of ₹300 per day under the new scheme, with no state's notified wage permitted to fall below this threshold.
The national average wage under VB-G RAM-G stands at ₹327.4 per day, up from ₹298.8 per day under MGNREGA.
The guaranteed employment entitlement per rural household has been raised from 100 days to 125 days per financial year.
Opposition parties have demanded a minimum daily wage of ₹500 and raised concerns about the shift from the demand-driven funding model of MGNREGA to normative annual allocations under the new Act.

Static Topic Bridges

MGNREGA, 2005 — The Predecessor Framework

The Mahatma Gandhi National Rural Employment Guarantee Act, 2005 was enacted under the UPA government and came into force on February 2, 2006. It created a legally enforceable right to work — guaranteed 100 days of unskilled manual employment per rural household per financial year — making it one of the world's largest public works programmes. Key provisions include: Section 3, which codifies the employment guarantee; Section 6, which authorises the Centre to notify wage rates (with a floor of ₹60 per day in the original Act); Schedule II, which governs conditions of work; and an unemployment allowance payable if work is not provided within 15 days of demand. MGNREGA was notable for its demand-driven architecture — central funding had to follow wherever work was demanded, with no fixed state allocation caps.

Enacted: 2005; operationally launched: February 2, 2006
Section 6(1): Central government empowered to notify wage rates; revised annually using Consumer Price Index–Agricultural Labourers (CPI-AL)
Supreme Court in Sanjit Roy vs State of Rajasthan (1983) held that wages below the statutory minimum constitute forced labour, violating Article 23 of the Constitution
Wage-to-material ratio mandated at 60:40 minimum; wages disbursed within a fortnight (Section 3(3))

Connection to this news: VB-G RAM-G directly replaces MGNREGA; understanding MGNREGA's structure — particularly its demand-driven funding and Section 6 wage mechanism — is essential for evaluating what has changed and what criticism of the new scheme is grounded in.

VB-G RAM-G Act, 2025 — Key Structural Changes

The Viksit Bharat–Guarantee for Rozgar and Ajeevika Mission (Gramin) Act, 2025 was passed by Parliament on December 18–19, 2025, and represents a significant legislative redesign of rural employment guarantee policy. Beyond the wage floor increase, the Act introduces Viksit Gram Panchayat Plans (village-level development plans), mandates technology-based monitoring, expands administrative expenditure limits from 6% to 9%, and constitutes Central and State Gramin Rozgar Guarantee Councils for policy oversight. Critically, it shifts from a fully demand-driven central funding model to normative annual allocations — states bear expenditure beyond the normative allocation — a change that critics argue will pressure states to artificially restrict demand.

Employment guarantee: increased from 100 to 125 days per household per year
Wage floor: ₹300/day (national interim base); state wages to be notified at or above this floor
Funding ratio: 60:40 (Centre:State) for most states; 90:10 for north-eastern states and UTs
Administrative expenditure cap: raised from 6% to 9%
Includes climate resilience works: embankments, flood management, shelter construction, forest fire control

Connection to this news: The ₹300/day notification is the first exercise of wage-setting power under the new Act, directly applicable to current affairs; the structural shift from MGNREGA is what the Prelims/Mains questions are likely to probe.

Minimum Wages and the Constitutional Framework

India's minimum wage framework operates through the Minimum Wages Act, 1948, which empowers the Centre and states to fix minimum wages for scheduled employments. For rural wage labour, the MGNREGA wage and the agricultural minimum wage have historically diverged, often with MGNREGA wages falling below state minimum wage for agricultural labour — a gap that drew judicial attention. The constitutional basis for minimum wages rests on Article 43 (Directive Principles — living wage for workers), Article 39(d) (equal pay for equal work), and Article 23 (prohibition of forced labour, interpreted to require at least minimum wage). The new ₹300/day floor attempts to partially address this historical divergence.

Minimum Wages Act, 1948: authorises Central/state governments to fix minimum wages for listed scheduled employments
Article 43 (DPSP): directs the State to secure a living wage to all workers
Article 23: prohibits begar and forced labour; used to argue that sub-minimum wages are unconstitutional
Sanjit Roy vs State of Rajasthan (1983): Supreme Court held paying below minimum wage for public works constitutes forced labour

Connection to this news: The ₹500/day demand by opposition parties is framed partly on the DPSP aspiration for a living wage; the ₹300/day floor anchors minimum wage policy debate for Prelims MCQs.

Key Facts & Data

VB-G RAM-G Act passed by Parliament: December 18–19, 2025; effective: July 1, 2026
National interim base wage floor under VB-G RAM-G: ₹300/day
National average wage under VB-G RAM-G: ₹327.4/day (up from ₹298.8/day under MGNREGA)
Employment guarantee: 125 days/year/household (was 100 under MGNREGA)
MGNREGA enacted: 2005; in force from February 2, 2006
Section 6(1) of MGNREGA: empowers Centre to notify wage rates; floor ₹60/day in original Act
Wage-material ratio under MGNREGA: minimum 60:40
Funding ratio under VB-G RAM-G: 60:40 (Centre:State) for most states; 90:10 for NE states/UTs
Administrative expenditure cap raised from 6% to 9%
Article 23 of Constitution: prohibition of forced labour (linked to minimum wage jurisprudence)
Article 43 of Constitution (DPSP): living wage for workers