Centre Releases Rs 95,692 Crore Interim Fund as VB-GRAM G Act Rolls Out
The central government has released an interim fund of Rs 95,692 crore to states as the VB-GRAM G Act officially came into effect on 30 June 2026. The new legislation replaces the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) and significantly expands the rural employment framework.
Key Changes Under the New Act
The VB-GRAM G Act raises the statutory guarantee of wage employment for eligible rural households from 100 days to 125 days per year. This marks a 25% increase in the minimum employment guarantee, aimed at providing greater livelihood security in rural areas.
According to Union Rural Development Minister Shivraj Singh Chouhan, the interim release of funds will ensure smooth implementation of the new scheme across states. The government has also revised wage rates under the Act, with adjustments linked to the Consumer Price Index for Agricultural Labourers.
Funding and Implementation
The Rs 95,692 crore interim fund is part of the Centre's commitment to finance the expanded guarantee. States are expected to utilise these funds for ongoing and new projects under the scheme, which includes works related to water conservation, drought proofing, and rural connectivity.
The VB-GRAM G Act also introduces a more streamlined grievance redressal mechanism and mandates the use of technology for real-time monitoring of works and wage payments. The government aims to reduce delays in wage disbursement and improve transparency.
Reactions and Impact
Rural development experts have welcomed the increase in guaranteed work days, noting that it could benefit over 15 crore rural households. However, some states have expressed concerns about the adequacy of funds and the capacity to implement the expanded scheme effectively.
Minister Chouhan stated, "The VB-GRAM G Act is a landmark step towards empowering rural India. The increased wage guarantee will provide a safety net for millions of families and boost rural economy." The government plans to review the implementation after six months and may consider further enhancements based on feedback.
