Union Budget 2026 | Government restructures rural jobs funding, channels Rs 95,692 crore to VB-G RAM G

The Viksit Bharat-Guarantee for Rozgar and Ajeevika Mission (Gramin), or VB-G RAM G scheme, which will replace Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) did not find mention in the Budget speech.

But Rs 1.26 lakh crore was allocated for the new and existing rural jobs guarantee schemes for 2026-27.

Of this, Rs 95,692 crore was allocated to VB-G RAM G, while Rs 30,000 crore was set aside for outgoing MGNREGS.

The total expenditure on MGNREGS, as per revised estimates from 2025-26, was Rs 88,000 crore, while initially, Rs 86,000 crore was allocated.

Rural Development and Agriculture and Farmers' Welfare Minister Shivraj Singh Chouhan told reporters after the budget that VB-G RAM G, to be notified by the Centre, will give states 6 months to transition from MGNREGS.

MGNREGS will continue till VB-G RAM G scheme is fully implemented and pending works are completed, rural development ministry officials have said separately.

The VB-G RAM G scheme guarantees 125 days of employment, up from 100 days under MGNREGS.

Unlike MGNREGS, where Centre paid 100% of the wage bill, VB-G RAM G is a centrally sponsored scheme with fund-sharing ratio of 60:40 between the Centre and most states, 90:10 for North-Eastern Region (NER) states, Himalayan states and union territories with legislatures, and 100% central share for union territories without legislatures.

Chouhan, who has highlighted misuse of funds under MGNREGS, said that since the new scheme follows a different funding pattern from MGNREGS, maintaining distinct allocations is necessary to ensure uninterrupted wage payments and smooth execution of ongoing works, while allowing states adequate time to realign administrative and financial systems.

The central government is framing rules for smooth transition of existing MGNREGS workers to new scheme, as well as for normative allocation of funds to states, he said. But Congress has criticised the government for scrapping MGNREGS.

"A listless, heartless budget from a clueless government. What began last session with the axing of MGNREGA has gone forward with massive welfare cuts in the name of 'fiscal discipline'," Congress general secretary (organisation) K C Venugopal posted on X.

According to Budget documents, total allocation for department of rural development is Rs 1,94,368.81 crore, marginally up from last fiscal - Rs 1,86,995.61 crore, as per revised estimates.

The allocation for the department of land resources for 2026-27 is Rs 2,654.33. In 2025-26, Rs 2,651 was allocated for this department, while revised estimate puts expenditure at Rs 1,757.4 crore.