VB-GRAM JI Act raises the employment ceiling on paper, but critics fear it weakens the rights-based foundation of MGNREGA
By Vikas Parasram Meshram
Editor’s Note:
This article is an analytical assessment of the provisions and policy implications of the VB-GRAM JI Act, 2025, based on the author’s reading of the law, available policy discussions and concerns raised by critics. The article distinguishes between official claims, critical interpretation and likely implementation challenges. TheNews21 welcomes responses or clarifications from the concerned authorities.
Jaipur, Rajasthan :
For nearly two decades, the Mahatma Gandhi National Rural Employment Guarantee Act, better known as MGNREGA, remained one of India’s most important rural employment safety nets. It was not merely a welfare programme. It was designed as a rights-based guarantee that allowed rural households to demand work from the state.
That framework now stands at a turning point.
The Viksit Bharat — Rozgar Aur Ajeevika Mission (Gramin) Guarantee Adhiniyam, 2025, referred to as the VB-GRAM JI Act, is set to replace MGNREGA from July 1, 2026. While introducing the legislation, Union Rural Development Minister Shivraj Singh Chouhan described the new framework as an attempt to address structural weaknesses in MGNREGA and convert it into a more modern, integrated and implementable rural employment guarantee system.
On paper, the promise appears larger. The number of guaranteed employment days per household has been raised from 100 to 125. The range of works has been reorganised around water security, rural infrastructure, livelihood assets and climate-disaster protection. Digital monitoring, biometric systems, geospatial planning, mobile applications and artificial intelligence-based fraud detection have been made central to the programme.
But behind this promise lies a deeper concern.
The most serious criticism of the new law is that it may weaken the rights-based character of rural employment guarantee. MGNREGA gave rural households a statutory right to demand unskilled work. Critics argue that the VB-GRAM JI framework shifts this foundation towards a centrally allocated, supply-driven programme in which the guarantee may depend more on annual allocations and notified areas than on household demand.
This distinction is not technical. It goes to the heart of rural livelihood security.
MGNREGA was linked to the idea of the right to work embedded in the Directive Principles of the Constitution. It also became an important instrument for strengthening rural purchasing power, creating local assets and protecting the poorest households during periods of agricultural distress. Its critics, however, have long argued that the scheme suffered from leakages, poor-quality assets, wage delays and uneven implementation across states.
The new law attempts to respond to these criticisms. But the manner in which it was passed has itself raised questions. The Bill was approved by the Lok Sabha on December 16, 2025, and received presidential assent within three days. Given the economic, social and administrative consequences of such a major reform, this speed has drawn criticism. Employment guarantee programmes are implemented primarily by state governments, yet critics say there is no clear public record of meaningful prior consultation with states. The law was also not referred to a standing committee or a Joint Parliamentary Committee, a process normally expected in the case of major legislative restructuring.
The concern is sharper because the law changes the fiscal relationship between the Centre and the states. Under the new cost-sharing structure, the states’ share of expenditure is reportedly raised from 10 percent to 40 percent, while the North-Eastern and Himalayan states continue under a 90:10 formula. For many states, especially those already under fiscal stress, this could become a major burden.
Estimates cited by critics suggest that if the 60:40 cost-sharing formula had applied in financial year 2025, states would have collectively borne an additional burden of around ₹31,000 crore. Uttar Pradesh alone would have had to contribute over ₹4,000 crore more, while Andhra Pradesh and Tamil Nadu would each have had to bear more than ₹3,000 crore. Bihar and Madhya Pradesh too would have faced additional burdens of over ₹2,500 crore each.
Such a shift cannot be treated lightly. Rural employment guarantee is not merely a budgetary item. It is a survival mechanism for millions of households.
Another major concern relates to coverage. Under MGNREGA, universal rural coverage became the defining principle after the initial phase of rollout. The new law, according to critics, gives the Centre the power to notify the areas where the guarantee will apply. It is true that a similar provision existed in the original MGNREGA framework during its phased implementation. But MGNREGA carried a clear direction of eventual universalisation. The new law, critics argue, does not appear to contain a comparable commitment within a fixed timeline.
If no transparent criteria are declared for selecting notified areas, fears of exclusion will naturally grow. Rural distress is not always uniform. Drought, migration, landlessness, caste vulnerability, crop failure and local unemployment patterns can vary sharply even within districts. A selective framework must therefore be backed by publicly available criteria and strong safeguards against arbitrary exclusion.
The law also appears to replace demand-driven funding with standard allocations determined by the Centre. This may have been designed to correct an old imbalance in MGNREGA, under which states with stronger administrative capacity often generated more employment and therefore received a higher share of funds, while poorer states with weaker systems lagged behind. This problem was real. High-poverty states did not always receive spending in proportion to their rural poverty burden.
But the solution cannot be only financial allocation. Poorer states often failed not because they did not need the scheme, but because they lacked administrative capacity, field staff, planning systems and timely payment mechanisms. If allocations are increased without strengthening state capacity, the money may remain underutilised. At the same time, if better-performing states see reduced central support, overall employment generation may fall. The danger is that the reform could reduce both coverage and expenditure instead of improving equity.
The proposed restriction of work during the peak agricultural season is another controversial point. Under the new framework, work is reportedly restricted to 60 days during the busiest farm season. Supporters may argue that this prevents competition with agricultural labour demand. But this argument has always been debated.
During the drafting of the 2005 Act, a similar idea drawn from the Maharashtra Employment Guarantee Act was considered and rejected. The reason was simple. The availability of public employment during the agricultural season gave rural workers bargaining power. It helped ensure that agricultural labourers were not forced to accept wages below the statutory minimum. MGNREGA was not only a direct employment provider; it also indirectly influenced rural wage levels.
Economist Karthik Muralidharan has argued that one of MGNREGA’s major effects was not limited to those who worked under the scheme, but extended to rural labour wages more broadly. Removing or reducing this public option during crucial months could weaken the bargaining position of landless labourers, especially in regions where large landowners dominate local labour markets.
The evidence that MGNREGA seriously disrupted agricultural labour supply has also been mixed. If peak sowing and harvesting months accounted for only a limited share of total person-days, a blanket restriction may not be the most balanced policy response.
The Centre has highlighted several positive features of the new law. The increase from 100 to 125 days is being projected as a major expansion. Stricter rules on unemployment allowance and delayed wage payment have also been mentioned. The classification of works under four broad themes may help align rural employment with water security, climate adaptation and livelihood assets.
Some of these changes are welcome. But the key question is whether they will change ground reality.
MGNREGA’s challenge was never the lack of a large legal promise. The challenge was actual delivery. Several audits and studies have shown that the average number of workdays received by households remained far below the 100-day ceiling. In many years, average employment hovered around 45 to 50 days. Only a small proportion of households received the full 100 days of work.
In this context, raising the ceiling to 125 days may remain symbolic unless demand registration, work opening, fund flow, measurement, wage payment and grievance redressal are substantially improved. A larger promise without stronger implementation may only deepen frustration.
The mandatory use of digital tools also needs careful scrutiny. Technology can improve transparency, reduce fake job cards and strengthen monitoring. But digital systems can also become exclusionary if workers face biometric failures, poor connectivity, app errors or lack of access to grievance mechanisms. The experience of attendance verification through mobile-based systems has already generated complaints from field workers and activists in several regions.
Digital governance must not become digital denial.
The long-standing weaknesses of MGNREGA are well known. Bihar, Maharashtra and Uttar Pradesh, despite having large numbers of rural poor, have often underperformed. Wage delays have weakened the credibility of the programme. Asset quality has varied across regions. Corruption through fake job cards, inflated measurements and use of machinery has been reported. Social audits, though powerful in design, have not been implemented consistently across states.
But these weaknesses call for reform, not dilution of rights.
There is also an important question about the future of rural employment itself. Should rural livelihood security in Viksit Bharat@2047 continue to depend mainly on unskilled manual labour? This is where the new law appears to miss a major opportunity.
Rural India is changing. The employment needs of the future will include care work, rural services, local climate adaptation, elderly support, childcare centres, community nutrition, digital public services, skill development and maintenance of common assets. A reimagined employment guarantee could have expanded beyond traditional manual works and recognised new forms of socially useful rural labour.
For example, crèches can help women participate in the workforce. Trained care workers will be needed as India’s population ages. Rural youth need pathways into productive local services. Climate adaptation will require village-level water management, soil conservation, disaster preparedness and ecological restoration. These could have been integrated into a forward-looking employment guarantee framework.
Instead, the new law appears to remain trapped between two impulses: retaining the language of guarantee while shifting towards a more centrally controlled and allocation-based model.
The real test of VB-GRAM JI will therefore not be its title or its promise of 125 days. The test will be whether a rural household can still demand work as a right. Whether wages are paid on time. Whether states receive adequate funds. Whether poorer districts are strengthened administratively. Whether digital systems help workers instead of excluding them. Whether employment is available when distress is real, not only when allocations permit it.
A guarantee that cannot be demanded is not a guarantee. It is only a scheme.
The promise of 125 days may sound impressive. But the question rural India will ask is simpler: how many days of actual work will come?
