Explained: Why MGNREGA Changed into VB-G RAM G Act 2025?

In India
December 25, 2025
Jatinder Kaur
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India replaced MGNREGA with the VB-G RAM G Act, 2025, marking a shift from a demand-driven job guarantee to a budget-managed rural employment system. This explainer examines the reasons, data, constitutional impact, and risks.

New Delhi (ABC Live): For almost twenty years, MGNREGA worked as India’s strongest rural safety net. It treated unemployment as a failure of the State, not as charity. As a result, rural households could demand work, and the government had to respond within a fixed time.

However, in December 2025, Parliament replaced this framework with the VB-G RAM G Act, 2025. The government described this move as a modern reform aligned with Viksit Bharat @2047. It promised more workdays, better rural assets, and stronger monitoring.

Yet, this change is not just about renaming a law. Instead, it alters how entitlements work, how money is shared between the Centre and states, and how rural welfare is enforced. Therefore, a key question emerges:

Has India shifted from a demand-driven right to a budget-managed employment system?

1. What MGNREGA Stood for in India’s Welfare System

MGNREGA was unique because it made welfare enforceable.

First, any rural household could ask for work.
Second, the State had a legal duty to provide it.
Third, if work was not given, the law required payment of unemployment allowance.
Finally, wages had to be paid on time.

Because of this design, MGNREGA acted as a shock absorber during droughts, farm stress, and the COVID-19 period. Moreover, it raised women’s participation in paid rural work across many states.

However, over time, several problems became clear.
For example, wage payments were often delayed.
Similarly, Panchayats lacked planning capacity.
In addition, many works remained incomplete.
As a result, confidence in delivery weakened.

These weaknesses shaped the environment in which the new law was introduced.

2. Why the Government Replaced MGNREGA

The VB-G RAM G Act, 2025, did not appear suddenly. Instead, it grew out of three linked pressures.

(a) Repeated Audit Findings

Over the years, CAG audits showed that many workers could not fully use their legal rights. This happened mainly because planning was weak, staff posts were vacant, and monitoring was uneven.

Importantly, the audits did not reject the idea of a job guarantee. Rather, they criticised poor execution.

(b) Fiscal Stress and Federal Tension

At the same time, MGNREGA spending rose sharply during distress years. Consequently, disputes between the Centre and states increased. States demanded more funds, while the Centre worried about open-ended costs.

(c) Shift toward Managed Welfare

Meanwhile, the government began redesigning labour and welfare laws more broadly. This trend is also visible in the new labour codes, which moved away from fragmented rights toward system-based management.

🔗 ABC Live context:
https://abclive.in/2025/11/22/india-new-labour-codes/

Therefore, the VB-G RAM G Act fits into a wider policy shift.

3. What the VB-G RAM G Act, 2025 Changes

Table 1: MGNREGA vs VB-G RAM G Act, 2025

Aspect	MGNREGA	VB-G RAM G Act, 2025	What This Means
Nature of the guarantee	Demand-driven legal right	Statutory guarantee within plans	Enforceability depends on funds
Statutory days	100 days	125 days	Higher promise, limited by budgets
Funding	Centre-heavy	60:40 Centre–State	States carry more risk
Planning	Gram Sabha labour budgets	Viksit Gram Panchayat Plans	More standard formats
Policy focus	Distress relief	Assets and livelihoods	Welfare tied to outcomes

As a result, rural employment moves from a rights-first model to a mission-style programme.

4. Data That Will Decide Whether the Guarantee Works

Since the law is new, outcomes are not yet visible. Therefore, early signals matter more than promises.

Table 2: Early-Warning Indicators to Track

Indicator	Why It Matters	Risk Signal
Workdays delivered	Shows real access	Promise rises, delivery flat
Wage payment time	Prevents distress debt	“Worked but unpaid”
Unemployment allowance	Tests enforceability	Rarely paid
Work completion	Asset credibility	Many starts, few finishes
Panchayat autonomy	Local legitimacy	Paper planning
Budget vs demand	Crisis response	Funds exhausted early

If budgets cap delivery during droughts or price shocks, the guarantee may weaken in practice.

5. Constitutional Analysis: Articles 21 and 41

Article 21 — Livelihood and Dignity

Courts have long linked livelihood with dignity under Article 21. While jobs are not a fundamental right, the arbitrary denial of survival support can raise constitutional concerns.

Therefore, if the VB-G RAM G Act blocks access during distress due to budget ceilings, courts may examine whether the design creates systemic exclusion.

Article 41 — Right to Work (Directive Principle)

Article 41 asks the State to help citizens during unemployment. MGNREGA came closest to turning this principle into reality.

However, the new Act restores greater executive discretion, which may dilute this protection.

6. Federalism: Who Bears the Burden Now?

The 60:40 funding model changes the balance.

On the one hand, the Centre keeps control over design and systems.
On the other hand, states must fund a larger share.
Consequently, poorer states face a higher risk of rationing work.

Thus, fiscal stress shifts downward while control stays central.

7. CAG Audit vs Legislative Response

What CAG Found

CAG audits repeatedly pointed to:

Weak planning
Payment delays
Incomplete works
Staff shortages

Yet, they never rejected employment guarantees themselves.

How the New Act Responds

The VB-G RAM G Act focuses on:

Asset completion
Integrated planning
Digital monitoring

However, it still lacks firm rules on payment timelines and staffing. Therefore, many old risks may remain.

8. Global Comparison: India’s New Position

Table 3: Global Rural Employment Models

Country	Model	Strength	Weakness
India (MGNREGA)	Job guarantee	Strong safety net	Execution strain
India (VB-G RAM G)	Planned guarantee	Asset focus	Enforceability risk
Brazil	Cash transfers	Fast relief	No assets
South Africa	Public works	Employment support	No legal right

India now sits between rights-based welfare and managed employment schemes.

9. Citizen Impact Test

If the law works:

Rural families get steady work.
Villages gain better assets.

If it fails:

Distressed households lose support.
Poor states struggle to deliver.
Local planning weakens.

Ultimately, only two questions matter:

Did people get work when they needed it?
Did wages arrive on time?

ABC Live Editorial Note

Editorial Note (ABC Live):
The VB-G RAM G Act, 2025 promises more days and better assets. However, welfare laws succeed only when they work under stress. If rural employment becomes budget-led instead of demand-led, the guarantee will weaken on the ground. Therefore, the next year of funding flows and payment timelines will decide whether this law is a true upgrade or a retreat from rights-based welfare.