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Centre notifies VB-GRAMG; 125-day rural employment law to replace MGNREGA from July 1
The VB-GRAMG Act guarantees every eligible rural household up to 125 days of paid unskilled manual work in a financial year — an increase of 25 days over MGNREGA
The central government on Monday notified the implementation of a new rural employment law, the Viksit Bharat - Guarantee for Rozgar and Ajeevika Mission (Gramin), (VB-GRAMG), 2025, replacing the nearly two-decade-old Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA). The new framework is set to take effect nationwide from July 1, 2026. A notification is a formal government order that gives legal force to a law. Once notified, states must begin preparing their systems, staff and schemes to roll out the new framework on the ground from the specified date.
The VB-GRAMG was introduced in the Lok Sabha on December 16, 2025, passed by the Lok Sabha on December 18, and cleared by the Rajya Sabha shortly after midnight on December 19. It received presidential assent on December 21, 2025. The Ministry of Rural Development (MoRD) notified this on Monday and set July 1, 2026 as the date for its nationwide implementation.
MGNREGA, enacted in 2005, guaranteed 100 days of wage employment per rural household per year. Under that law, states submitted annual work plans based on ground-level demand and the Centre was obliged to release funds accordingly. The new law changes both the number of guaranteed workdays and the way funds are allocated between the Centre and the states.
The VB-GRAMG Act guarantees every eligible rural household up to 125 days of paid unskilled manual work in a financial year — an increase of 25 days over MGNREGA.
Beyond the increase in days, the way funds are allocated also changes. Under MGNREGA, states submitted annual work plans based on ground-level demand, and the Centre was obliged to release funds accordingly — making it an open-ended commitment. Under the new law, the Central government will determine a state-wise normative allocation — a fixed spending ceiling — for each financial year. Any expenditure by a state beyond this allocation must be borne by the state government itself. The law does not define what parameters will be used to fix these ceilings — it says the Central government will specify them later through rules.
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Cost-sharing follows a 60:40 formula between the Centre and states, with higher central support for northeastern and Himalayan states and full funding for Union Territories without legislatures. The total annual outlay is estimated at approximately ₹1.51 lakh crore, including state contributions, with the Centre’s share projected at roughly ₹95,700 crore.
Under the new law, every work must be drawn from a Viksit Gram Panchayat Plan (VGPP) and aggregated at higher administrative levels into the Viksit Bharat National Rural Infrastructure Stack — linking village-level employment directly to a national infrastructure planning framework tied to PM Gati Shakti.
As per the new law, all work must be done directly by labourers; private contractors are not allowed to execute any project. Machines that replace manual labour must be avoided as far as possible. For every rupee spent in a district, at least 60 paise must go towards wages and no more than 40 paise towards materials. When assets are built for individual households — such as a well or a farm pond — priority must be given to families from Scheduled Castes, Scheduled Tribes, women-headed households and persons with disabilities.
According to the new law, if a worker applies for work and the government fails to provide it within 15 days, the state government must pay a daily unemployment allowance for every day the worker remains without work. This provision existed under MGNREGA as well, but workers who were denied jobs almost never received the allowance they were legally entitled to. Under the new law, the same obligation continues, with stronger accountability mechanisms. Social audits are required at least twice a year, supported by real-time dashboards, GPS-based monitoring and digital attendance systems. The administrative expenditure ceiling has also been raised from 6% to 9%.
