The Centre is all set to roll out from July 1 the new rural employment guarantee scheme, VB–G RAM G, which replaces the MGNREGA, with the Union Rural Development Ministry on Wednesday telling a parliamentary panel that as many as 25 states have already allocated their share of funds for the programme. A meeting of the Parliamentary Standing Committee on Rural Development and Panchayati Raj, headed by Congress MP Saptagiri Ulaka, saw a detailed briefing on the steps taken for the nationwide implementation of the Viksit Bharat – Guarantee for Rozgar and Ajeevika Mission (Gramin) [VB–G RAM G] Act, 2025, from July 1, sources privy to the deliberations said. Secretary in the Rural Development Ministry Rohit Kansal is learnt to have conveyed to the members of the committee that 25 states have already allocated funds for VB-G RAM G programme and all administrative and policy actions are being initiated.
All major states have allotted funds required to implement this scheme from July 1, the sources said. Beneficiary workers will be given new smart job cards in place of job cards issued under the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA), 2005. The new job cards will have the special feature of face recognition to ensure transparency and accountability, the sources said. The VB-G RAM G, which replaces MGNREGA, guarantees 125 days of wage employment per rural household in each financial year to such households whose adult members volunteer to undertake unskilled manual work, contributing to income security beyond the earlier 100-day entitlement.
The new Act represents a major upgrade over MGNREGA, fixing structural weaknesses while enhancing employment, transparency, planning, and accountability, according to officials. They said the shift from a central sector scheme to a centrally sponsored framework reflects the inherently local nature of rural employment and asset creation. Under the new architecture, states share both cost and responsibility through a normative allocation framework, creating stronger incentives for effective implementation and preventing misuse.
The total estimated annual requirement of funds on wage, material, and administrative components is Rs 1,51,282 crore, including the state share. Of this, the estimated central share is Rs 95,692.31 crore.
This transition does not impose an undue financial burden on states, the officials said. The funding structure is calibrated to state capacity, with a standard cost-sharing ratio of 60:40 between the Centre and states, enhanced support of 90:10 for the northeastern and Himalayan states, and 100 per cent central funding for Union Territories without legislatures. States were already bearing a share of material and administrative costs under the earlier framework, and the move to predictable normative allocations further supports sound budgeting, they said.
Provisions for additional assistance to states during disasters and stronger oversight mechanisms also help reduce long-term losses arising from misappropriation, reinforcing fiscal sustainability alongside accountability. The Centre said the scheme will focus on four broad categories of works -- water security projects, core rural infrastructure, livelihood-related infrastructure and extreme weather mitigation works.
Under MGNREGA, work was divided into broad categories such as water conservation, drought-proofing, irrigation, renovation of traditional water bodies, land development and flood control. The new law also introduces the concept of 'Viksit Gram Panchayat Plans' (VGPPs), which will serve as convergence-based local development plans prepared by Gram Panchayats and approved by Gram Sabhas. According to the government, all works under the Act must emerge from these village development plans to ensure "need-based and saturation-focused" rural development.
The Centre has said the transition from MGNREGA to the new law will be "seamless and uninterrupted". The MGNREGA will formally stand repealed from July 1, 2026, the same date on which the VB-G RAM G Act comes into effect. Existing MGNREGA works will continue and will be migrated into the new framework. The government has said incomplete public assets and ongoing projects will be prioritised for completion. Existing job cards will also remain valid temporarily for workers whose e-KYC has already been completed, until new "Gramin Rozgar Guarantee Cards" are issued. The government has further clarified that fresh works can also be opened during the transition phase if ongoing works are insufficient to meet labour demand.