Explained | VB-G RAM G replaces MGNREGA: 125 workdays, higher wages and states' concerns

CHENNAI: The Centre on Wednesday (July 1) rolled out the Viksit Bharat-Guarantee for Rozgar and Ajeevika Mission (Gramin) (VB-G RAM G), replacing the two-decade-old MGNREGA, with Rural Development Minister Shivraj Singh Chouhan saying the government's priority is to ensure no eligible rural worker is left without work even for a single day.

To facilitate the rollout, the government released an interim allocation of Rs 95,692.31 crore and issued operational guidelines for the programme, which guarantees 125 days of wage employment, revises the Centre-State funding pattern and raises daily wages nationwide.

The rollout follows months of political opposition from several states over changes to funding, allocation of work, and implementation.

The national launch of the VB-G RAM G Act was held on July 2 at Mukkavaripalle village in Obulavaripalle mandal of Tirupati district in Andhra Pradesh.

What is VB-G RAM G?

The Viksit Bharat-Guarantee for Rozgar and Ajeevika Mission (Gramin) is the Centre's new rural employment law that replaces MGNREGA. It guarantees up to 125 days of wage employment to eligible rural households undertaking unskilled manual work, up from the earlier 100-day guarantee.

What changes for workers?

• The Centre has increased the national average daily wage from Rs 298.8 under MGNREGA to Rs 327.4 under VB-G RAM G, marking an average increase of Rs 28.6 per day, or over 10 per cent.

• The Ministry of Rural Development said the revised wage rates, effective from July 1, have been increased across all 34 States, Union Territories and wage regions. 29 States and Union Territories have made budgetary provisions for the Act, while 24 States have notified their VB-G RAM G state schemes.

• It has also fixed an interim minimum wage of Rs 300 a day in 21 States. Prior to this notification, wage rates in several States were below Rs 300, with the lowest notified wage being Rs 241 per day.

• States such as Uttar Pradesh, Bihar, Jharkhand, West Bengal, Assam, Arunachal Pradesh and Himachal Pradesh have witnessed wage increases ranging between 15 and 25 per cent.

• The government said the revised wages favour states with historically lower wage rates, while higher-rate states have also received hikes: Haryana Rs 409, Goa Rs 406, Kerala Rs 401 and Sikkim's high-altitude gram panchayats Rs 450 per day.

• Arunachal Pradesh and Nagaland will see the highest percentage increase of nearly 24.5 per cent.

• Existing e-KYC-verified MGNREGA job cards will remain valid until new Gramin Rozgar Guarantee Cards are issued.

• Unlike MGNREGA, where the Centre bore all unskilled wage costs and most material expenses, VB-G RAM G mandates a 60:40 Centre-State cost-sharing ratio (90:10 for northeastern and Himalayan states) for wages, materials and administrative expenses.

• Under VB-G RAM G, states can suspend scheme works for up to 60 days a year during peak agricultural seasons to ensure labour availability for farm activities.

What has Tamil Nadu done?

The Tamil Nadu government has urged the Union government to restore the earlier funding pattern and continue the rural employment programme under the name of Mahatma Gandhi. In a letter to Prime Minister Narendra Modi, Chief Minister C Joseph Vijay on Wednesday said the revised funding pattern would impose an additional financial burden of more than Rs 5,000 crore annually on the State.

The Chief Minister requested the Centre to continue bearing 100 per cent of wage and administrative costs and share the material component in a 75:25 ratio between the Union and State governments, as under the earlier framework.

Vijay further sought changes to the provision requiring states to notify a fixed 60-day suspension of works during peak agricultural seasons, suggesting that district collectors be allowed to determine the period based on local conditions. He also requested that wage employment under the scheme be permitted for State-sponsored rural housing projects.

Which states have opposed?

Five Opposition-ruled states — Karnataka, Kerala, Punjab, Telangana and Jharkhand — have passed resolutions opposing the Act and seeking the restoration of MGNREGA.

The AAP government had convened a special Assembly session in December last year and passed a unanimous resolution opposing the VB-G RAM G Act, stating that it converts the MGNREGA from a demand-driven, rights-based programme into a norm-based scheme, imposes an additional financial burden on states by changing the funding pattern, and weakens the federal structure by reducing the Centre’s responsibility. However, the state government reversed its stand and notified the scheme's implementation on June 26.

BJP-ruled states such as Madhya Pradesh and Bihar have questioned the increased financial burden on state exchequers.

What is Congress' objection?

Congress leader and MP Saptagiri Ulaka alleged that unlike MGNREGA, where the Centre bore nearly all labour costs and material costs followed a 60:40 ratio, VB-GRAM G imposes fixed budgets, applies the 60:40 ratio to combined labour and material costs, and increases states' financial burden.

“If additional work needs to be provided beyond this, the financial burden will fall on the state government,” he said. MGNREGA involved a process of identifying specific work projects -- with the Gram Sabha deciding where the work should take place -- but this participatory mechanism has been eliminated under VB-G RAM G, Ulaka claimed.

The Congress party has demanded that the wage rate be fixed at Rs 500 per day.

(With inputs from PTI and Bureau)