New Delhi: The Union government’s move to introduce a new rural employment legislation to replace the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) has triggered sharp political reactions, with concerns being raised over funding responsibilities, federal balance and the future of rights-based employment guarantees.
The proposed law, titled the Viksit Bharat—Guarantee for Rozgar and Ajeevika Mission (Gramin) Bill, 2025, is expected to be tabled in the Lok Sabha this week. According to details available from the draft framework, the Bill aims to expand guaranteed wage employment for rural households from the current 100 days to 125 days in a financial year, while restructuring how the scheme is funded and administered.
One of the most significant changes under the proposed framework is the revised cost-sharing formula between the Centre and the states. For most states and Union Territories with legislatures, expenditure under the scheme would be shared in a 60:40 ratio, compared to the existing structure under MGNREGA where the Centre bears the full cost of unskilled wages and the majority of material and skilled labour costs. However, for north-eastern and Himalayan states such as Uttarakhand, Himachal Pradesh and Jammu and Kashmir, the Centre’s contribution would remain at 90 per cent.
The Bill also introduces a system of state-wise “normative allocations” to be determined annually by the Centre based on prescribed parameters. This marks a shift from the demand-driven character of MGNREGA, under which funds were released in response to work demand generated at the local level.
While wage rates are proposed to remain unchanged and aligned with existing MGNREGA notifications, the Bill restructures governance by providing for a Central Gramin Rozgar Guarantee Council and corresponding councils at the state level. Steering committees are also envisaged to guide allocations, convergence with other schemes and operational planning.
Another provision allows states to suspend scheme activities during notified agricultural seasons to ensure adequate labour availability for farming operations. The legislation also proposes special schedules of work suitable for women, senior citizens and persons with disabilities. Existing provisions for unemployment allowance and delay compensation have been retained, though the financial burden for such payments would rest with state governments.
Government officials have said the new framework is aligned with the broader Viksit Bharat vision and seeks to focus rural employment on durable assets linked to water security, climate adaptation, rural infrastructure and livelihoods. They have indicated that gram panchayat plans would continue to be prepared locally but integrated with national spatial platforms and digital systems to improve efficiency and monitoring.
However, Opposition parties have criticised the Bill on multiple counts. CPI(M) Rajya Sabha MP John Brittas said the proposal weakens the legal guarantee of employment by shifting costs to states and replacing demand-driven funding with centrally fixed ceilings. He argued that states could face a substantial additional financial burden and warned that technological mandates could exclude vulnerable workers.
Congress president Mallikarjun Kharge alleged that the move was part of a broader attempt to dilute and dismantle MGNREGA, while senior Congress leader Jairam Ramesh said the Bill should be referred to a parliamentary standing committee for detailed scrutiny. Tamil Nadu Chief Minister M K Stalin also criticised the funding changes, calling them unfair to states.
Some Opposition leaders, including Shashi Tharoor, expressed concern over the removal of Mahatma Gandhi’s name from the scheme, urging caution against politicising symbols associated with rural welfare.
As Parliament prepares to debate the proposed legislation, the VB–G RAM G Bill has emerged as a flashpoint over Centre-state relations, rural livelihoods and the future direction of employment guarantees in India.
