Centre Plans to Replace MGNREGA with New Rural Employment Scheme

New Delhi: The Central government is preparing to replace the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA), one of the country’s most prominent employment schemes, with a new programme titled the Viksit Bharat—Guarantee for Rozgar and Ajeevika Mission (Gramin) Bill, 2025 (VB–G RAM G).

According to media reports, the proposed scheme seeks to increase the guaranteed number of workdays from 100 to 125. At the same time, it is expected to place a higher financial responsibility on State governments.

The draft Bill was circulated among Members of Parliament on Monday and has been presented as legislation to “establish a rural development framework aligned with the national vision of Vikshit Bharat @2047.”

Under the existing MGNREGA framework, the Centre fully covered wage payments, while States shared the cost of materials and administrative expenses. This arrangement is set to change under the new Bill. Section 22 states that, except for Northeastern States, Himalayan States, and three Union Territories, States will now be required to contribute 40 per cent of the total expenditure.

While this shift increases the financial burden on States, the proposed law also gives the Centre greater control over the scheme’s implementation. Section 4(5) specifies: “The Central government shall determine the State-wise normative allocation for each financial year, based on objective parameters as may be prescribed by the central government.” Unlike MGNREGA’s demand-driven model, the new framework fixes allocations in advance.

In addition to deciding State-wise budgets, the Centre will also have the authority to determine where the scheme is implemented. Section 5(1) empowers the Union government to “notify rural areas in a State” where the programme will operate.

Another notable departure from MGNREGA is a provision that allows the programme to be paused during peak agricultural seasons to “facilitate availability of labour.” The Bill also formally incorporates several technology-based measures already in use under MGNREGA, including mobile app-based attendance, Aadhaar-linked payments, and geo-tagging of worksites.

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