VB-G RAM G to replace MGNREGA, Opposition says why remove ‘Mahatma’

The government is all set to introduce a new Bill in the Lok Sabha on Tuesday to replace the existing Mahatma Gandhi National Rural Employment Guarantee (MGNREGA) Act.

The move has sparked strong protests from the Congress-led INDIA bloc. It slammed the decision to drop Mahatma Gandhi’s name from the “only law dedicated to him” and said the new Bill would burden the states financially by changing the nature of the scheme from 100 per cent centrally funded to Centre-state fund sharing in a 60:40 ratio.

The Viksit Bharat Guarantee for Rozgar and Ajeevika Mission Gramin (VB-G RAM G) Bill-2025, listed for introduction in the LS on Tuesday, proposes a major overhaul of the 20-year-old MGNREGA, with a guarantee of 125 (in place of the current 100) days of employment per rural household whose adult members volunteer for unskilled manual work.

The draft legislation moots the following major changes — replacement of the current nomenclature dedicated to Mahatma Gandhi with G Ram G; rise in daily wages from Rs 205 to Rs 240; shift from demand-based budget allocation to normative funding that uses pre-defined, objective norms like performance, enrolment and strategic goals, rather than just demand, to distribute funds; switch from 100 per cent centrally funded scheme to centrally sponsored scheme (CCS) model with standard Centre-state fund sharing in 60:40 ratio; mandatory unemployment allowance in case job is not given within 15 days of application; compulsory 60-day no work period to ensure the availability of agricultural labour during peak sowing and harvesting season. The dropping of Mahatma Gandhi’s name has generated political heat, with the Congress dubbing PM Narendra Modi’s gestures of homage to the Father of the Nation as “hollow, hypocritical”. The government rejected the accusations and said the overhaul of the 20-year-old law was long due. Under the new CCS model, the standard fund sharing ratio will be 60:40 (Centre:state); the North-East and Himalayan states/UTs will have 90:10 Centre-state/UT sharing and the UTs without legislature will have 100 per cent central funding. The states will be free to notify unemployment allowance but it cannot be less than one-fourth of the notified wage rate for the first 30 days during the financial year and not less than one-half of the wage rate for the remaining period of the financial year.

Also, unlike in the existing structure where a range of works can be undertaken based on work demand, the new Bill aims to create employment and durable rural infrastructure across four defined priority verticals — water security through water-related works; core-rural infrastructure; livelihood-related infrastructure; and special works to mitigate extreme weather events. Among promised improvements are higher days of assured jobs, strategic focus on four sectors, localised and spatially integrated planning through panchayat-level plans.

“All assets created will be aggregated into the Viksit Bharat National Rural Infrastructure Stack, ensuring a unified, coordinated national development strategy,” sources said. Though the Congress-led Opposition slammed the move to drop Mahatma Gandhi’s name from the “only law dedicated to him” and said the new Bill would burden the states financially, official sources said the new structure was balanced and sensitive to state capacities. “The states already pay 25 per cent for material and 50 per cent towards admin costs. Predictable normative allocation will aid budgeting. The states can seek extra support during disasters and better oversight under the new law will reduce long-term losses from misappropriation,” the government said.

Why the new Bill

Probe in 19 districts of West Bengal has found non-existent works, fund misuse, leading to freeze

Monitoring in 23 states in FY 2025-26 showed works “not found or not commensurate with expenditure”, machine use where labour was required

In 2024-25, misappropriation was ₹193.67 crore across states; only 7.61 per cent of households completed 100 days post-Covid

Leakages, weak verification, poor compliance required a new framework, not minor tweaks

MGNREGA was built for 2005, but rural India has transformed

Poverty fell from 25.7 per cent (2011-12) to 4.86 per cent (2023-24)

MGNREGA’s open-ended model had become outdated

On normative funding, sources said it aligned the MGNREGA with the budgeting model used for most existing Government of India schemes, without reducing the employment guarantee.

“A demand-based model leads to unpredictable allocations and mismatched budgeting. Normative funding uses objective parameters, ensuring predictable, rational planning while still guaranteeing that every eligible worker receives employment or unemployment allowance,” the officials said.

Explaining the mandatory 60 days of no work provision, officials said 60 days was aggregated, not continuous.

“Workers still get 125 guaranteed days in the remaining 300 days. So farmers and labourers both benefit,” said the sources.

On the move to the Centre-state fund sharing model from the current 100 per cent central funding model, which is bound to irk the states, the government said the states would now share both the cost and responsibility, and better incentives would reduce misuse.

Rural Development Minister Shivraj Singh Chouhan will pilot the Bill in the Lok Sabha with the BJP on Monday issuing a whip to its members to be present in Parliament till the last working day — December 19.