The Center on Monday announced that the India Guarantee for Employment and Livelihood Mission (Rural) Act, or VB-G RAM G Act, 2025, will be implemented across India from July 1, replacing the Mahatma Gandhi National Rural Employment Guarantee Act (MNREGA) after almost two decades.The government has introduced the new law as a “next generation rural development framework” in line with the vision of Develop India 2047, which promises to increase guaranteed wage employment from 100 days to 125 days annually while more closely integrating rural jobs with infrastructure creation, climate resilience and village-level planning.In a separate notification, the Rural Development Ministry confirmed that the MNREGA Act, 2005, will stand repealed with effect from July 1, 2026.However, the Center assured that the transition will be “seamless and seamless”.“The works going on under MNREGA till June 30 will be saved and moved to the new structure,” the notification said.The ministry said the existing e-KYC-verified MNREGA job cards will remain valid until the new “Rural Employment Guarantee Card” is issued.The government said workers will not be denied employment pending e-KYC verification, while new registrations will continue at the gram panchayat level for those without job cards.Draft rules relating to wage payment, grievance redressal, allocation criteria and transitional provisions are currently being prepared in consultation with States and Union Territories and will soon be opened for public consultation.The Center described gram panchayats as the “central pillar” of rural transformation under the new framework.
What changes under the new law?
The biggest change is the increase in guaranteed rural employment under MNREGA from 100 days to 125 days annually for rural households seeking unskilled manual work.
The new Act reorganizes permitted operations into four broad categories:
- Water Security Projects
- core rural infrastructure
- Livelihood Infrastructure
- extreme weather mitigation work
Under MNREGA, the works were categorized around activities like water conservation, drought prevention, irrigation, flood control, land development and renovation of traditional water bodies.The new framework also introduces “Vikit 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 projects under the Act should emerge from these village development plans to ensure “need-based and saturation-centric” rural development.Officials say the law seeks to move beyond a purely “demand-driven wage program” toward a convergence-based rural development model with stronger local planning and infrastructure creation.The inclusion of extreme weather mitigation projects has also been introduced as a response to increasing climate vulnerabilities in rural India.
How will the transition happen?
The Center said the transition from MNREGA to VB-G RAM G Act will be smooth, with all ongoing projects being transferred to the new framework.Priority will be given to completing incomplete public assets and ongoing projects.Existing MNREGA job cards linked to e-KYC will remain temporarily valid until new cards are issued under the revised system.The government has also clarified that if existing projects are inadequate to meet the labor demand, new works can be opened during the transition period.
What remains unchanged?
Many key employee protections will remain intact under the new framework.Employment must still be provided within 15 days of demand, failing which workers become eligible for unemployment allowance payable by state governments.Wages will continue to be transferred directly to bank or post office accounts through DBT and should be paid weekly or within a fortnight after the muster roll is closed.The law also retains provisions for compensation for delayed salary payments.
What are the new administrative features?
Attendance at workplaces will now be recorded through a face authentication-based system.However, the government said exceptions would be allowed in cases involving poor connectivity, technical failures or other genuine difficulties.Another key feature is the restriction on working during the peak agricultural season. States will notify sowing and harvesting periods to avoid labor shortage in agriculture.
How will the funding work?
The funding pattern under the new framework is different from MNREGA.Under VB-G RAM G Act:
- Northeast and Himalaya States will receive 90:10 Centre-State funding
- Other states and union territories with assemblies will follow the 60:40 ratio
- Union territories without legislature will get 100 percent central funding
The material expenditure component at the district level has been limited to 40 percent.Under MNREGA, the Center bore the labor costs entirely, while the material costs were shared between the Center and states in the ratio of 75:25.A major change noted by critics is that MNREGA was demand-driven, requiring the Center to allocate additional funds whenever demand for work increased.Under the new law, allocation to states will follow standard limits, with expenditure in excess of the sanctioned allocation to be borne by state governments.
Why does the government say there is a need for a new law?
The government argues that the new framework modernizes rural employment by integrating livelihood creation, infrastructure development and climate resilience into a single framework.Officials say the enhanced 125-day employment guarantee, convergence-based scheme and availability of uninterrupted work during the transition are among the key reforms of MNREGA.The Center has also highlighted the following provisions:
- mandatory appointment letter
- Free health checkup for workers aged 40 years and above
- Provision of equal work, equal pay and equal opportunities for women working in different shifts
- Creation of National Reskilling Fund for workers who lose jobs
- Weekly working hours limit 48 hours
- mandatory overtime pay
- At least one weekly rest day for workers
What concerns are being raised?
Opposition parties and labor rights groups have strongly questioned the cancellation of MNREGA instead of strengthening the existing structure.Congress leader Jairam Ramesh described the move as “yet another lazy exercise in headline-grabbing” and alleged that the only guarantee under the new law is “excessive centralization” and weakening of rural labor rights.“The only guarantee provided by VB-G Ram G is excessive centralization and weakening of the bargaining power of rural labour,” Ramesh said on X.He also questioned why operational details were still unavailable despite the law coming into effect from July 1.Activists have also expressed concerns that mandatory face-authentication attendance could exclude workers in remote areas with weak internet access or elderly workers who face authentication failures.Others fear that shifting the program’s focus toward convergence and long-term planning could weaken its core strength as a legal guarantee for immediate wage employment.There are also concerns that restricting work during the peak agricultural season could reduce earning opportunities for landless labourers.Critics have additionally sought clarity on whether the extended 125-day guarantee will be backed by adequate budgetary support, pointing to repeated delays in salary payments and release of funds under MNREGA in recent years.