VB-GRAMG Act to replace MGNREGA starting July 1

India's new rural employment law, VB-GRAMG, replaces MGNREGA, offering 125 days of work. It starts July 1, with changes in funding and job cards.

The central government on Monday notified the implementation of the new rural employment law — the Viksit Bharat - Guarantee for Rozgar and Ajeevika Mission (Gramin), (VB-GRAMG), 2025 — that replaces the nearly two-decade-old Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA). The new law will take effect nationwide from July 1.

Workers prepare a paddy field in the farmlands of Kadamakkudy in Kochi, Kerala. (PTI)

TVB-GRAMG was introduced in the Lok Sabha on December 16, 2025, passed by the Lok Sabha on December 18, cleared by the Rajya Sabha shortly after midnight on December 19, and received presidential assent on December 21, 2025.

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 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.

VB-GRAMG guarantees every eligible rural household up to 125 days of paid unskilled manual work in a financial year — an increase of 25 days. Under the new funding model, the Central government will determine a state-wise normative allocation — a fixed spending ceiling — for each financial year. Any expenditure beyond this ceiling must be borne by the state. The law does not define the parameters for fixing these ceilings, stating the Central government will specify them later through rules.

Cost-sharing follows a 60:40 formula between the Centre and states, with a 90:10 ratio for northeastern and Himalayan states and full central funding for Union Territories without legislatures. The total annual outlay is estimated at approximately ₹1.51 lakh crore, with the Centre’s share projected at roughly ₹95,700 crore.

While notifying the new law, the ministry of rural development clarified that existing MGNREGA Job Cards will remain valid until new Gramin Rozgar Guarantee Cards are issued, but only for workers who have completed e-KYC.

Union rural development minister Shivraj Singh Chouhan said:  “The new law guarantees 125 days of work with wages paid directly to bank accounts within 15 days and compensation for any delay. States have had six months to prepare and those not ready by July 1 will still be governed by VB-GRAMG funding rules from that date. This is a new dawn in the lives of workers and a milestone in building developed villages as a foundation for a developed India.”

Congress leader Jairam Ramesh said:  “The notification adds nothing new to what is already known—it is yet another lazy headline-grabbing exercise by a government that specialises in such exercises. If VB-GRAMG is to be implemented from July 1, all operational details should have been available by now. Public consultations with state governments must be done meaningfully, not just to complete a formality. The only guarantee VB-GRAMG offers is extreme centralisation and weakening of the bargaining power of rural labour. The constitutional right to work and the right to wages for rural Indian families is being stolen.”