The Economic Survey 2025-26, presented by Finance Minister Nirmala Sitharaman in the Lok Sabha, has provided a comprehensive assessment of India's rural employment landscape, marking a pivotal moment in policy evolution. The document acknowledges the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) for achieving significant gains in participation, digitisation, and transparency over its operational history. However, it simultaneously points out that persistent structural weaknesses ultimately limited the scheme's overall effectiveness and impact.
A New Legislative Framework for Rural Development
In a landmark move in December 2025, the NDA government repealed the two-decade-old MGNREG Act, 2005, and enacted the Viksit Bharat—Guarantee for Rozgar and Ajeevika Mission (Gramin) Act, 2025, commonly referred to as the VB-G RAM G Act. The Economic Survey terms this new legislation "a comprehensive legislative reset" that represents a decisive and fundamental shift in India's approach to rural employment guarantees.
Key Objectives and Upgrades of the VB-G RAM G Act
According to the Survey, the VB-G RAM G Act is designed to modernise the rural employment guarantee framework by introducing several critical enhancements:
- Strengthening accountability mechanisms for better governance and implementation.
- Aligning employment creation with long-term infrastructure development goals.
- Incorporating climate resilience as a core component of rural works.
- Enhancing planning processes to ensure more sustainable and impactful outcomes.
The Survey explicitly notes that "the new Act represents a significant upgrade over MGNREGA, fixing structural weaknesses while enhancing employment, transparency, planning and accountability." This statutory overhaul aims to synchronise rural employment initiatives with the broader, long-term vision of Viksit Bharat 2047.
Focus on Village Commons and Infrastructure
Beyond employment, the Economic Survey 2025-26 also emphasises the urgent need for the revival of "village commons", which include vital community resources such as grazing fields and water bodies. This focus underscores a holistic approach to rural development, where employment generation is intertwined with the restoration and maintenance of shared ecological and economic assets.
The VB-G RAM G Act builds upon the documented improvements of MGNREGS while proactively addressing its shortcomings. It establishes a modern, accountable, and infrastructure-focused framework intended to deliver more robust income security and tangible infrastructure outcomes for rural communities.
Political Context and Criticism
The legislative change has not been without controversy. The Opposition has criticised the government over specific provisions within the VB-G RAM G Act. Key points of contention include:
- The fund-sharing pattern outlined in Section 22.
- The normative allocation criteria specified in Sub-section 5 of Section 4.
- A provision for pausing the employment guarantee during peak agricultural seasons, as per Section 6.
These criticisms highlight the ongoing political debate surrounding the balance between fiscal responsibility, administrative efficiency, and the unconditional nature of employment guarantees in rural India.
In summary, the Economic Survey 2025-26 positions the VB-G RAM G Act as a transformative policy instrument. It seeks to move beyond the legacy of MGNREGS by creating a more integrated, outcome-oriented, and future-proof system for securing livelihoods and fostering sustainable development in rural India.
