The central government has set its sights on April 1, 2026, as the launch date for a new rural employment guarantee programme that will succeed the long-running Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS). Union Rural Development Minister Shivraj Singh Chouhan revealed the timeline, stating that states will be granted a six-month window to implement the revamped scheme after its rollout.
Key Features and Financial Restructuring
The proposed legislation, named the Viksit Bharat-Guarantee for Rozgar and Ajeevika Mission (Gramin) Bill-2025 or VB-G RAM G Bill, introduces a significant shift in financial responsibility. Under the new framework, states will be required to shoulder 40% of the financial burden. This marks a departure from the existing MGNREGS model where the Centre covers 100% of labour costs and 75% of material costs.
However, the Bill provides for differential funding. The 11 northeastern and hill states will only have to contribute 10% of the scheme's expenditure, while it will be entirely centrally funded in the four Union Territories. Nineteen larger states will bear the 40% share.
Four-Pillar Work Structure for Rural Development
The new scheme proposes to categorise all permissible works under four broad themes to ensure focused development. The proposed categories are:
- Water Security
- Rural Infrastructure
- Livelihood Infrastructure
- Disaster Resilience
Minister Chouhan emphasised that the scheme is designed to generate ample employment while creating basic amenities in villages, aligning with the national goal of becoming a developed nation. He defended the increased state share, noting that in a federal structure, states have a responsibility for village development. He pointed to rising revenue collections and states' share of GST as sources for this funding.
Addressing Controversies and Implementation Mechanics
Responding to criticism from the Opposition regarding the removal of Mahatma Gandhi's name from the scheme, Chouhan stated that the government deeply reveres Gandhi and follows his ideals. He argued that reverence is demonstrated through actions and conduct, not merely names, and cited historical precedent of schemes being renamed.
On the crucial question of how funds will be allocated to states, Chouhan indicated that the NITI Aayog will devise a formula based on "objective parameters" to determine state-wise 'normative allocation'.
The fiscal impact on states is expected to be substantial. Based on the 2024-25 total expenditure of Rs 1.04 lakh crore (with wages at Rs 73,337 crore and material cost at Rs 25,987 crore), preliminary calculations suggest the new cost-sharing model could impose an additional annual fiscal burden of approximately Rs 30,000 crore on states, excluding West Bengal.
