VB-G RAM G Act to come into force from July 1: All you need to know

New Delhi: The Centre on Monday announced that the Viksit Bharat — Guarantee for Rozgar and Ajeevika Mission (Gramin) Act will come into force across the country from July 1, replacing the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA).

The new law, referred to as the VB-G RAM G Act, provides for 125 days of guaranteed wage employment to rural households in a financial year, compared to 100 days under the existing MGNREGA.

According to a notification issued by the Ministry of Rural Development, the Act will come into force in all states and Union Territories on July 1.

In another notification, the ministry stated that the Mahatma Gandhi National Rural Employment Guarantee Act, 2005 (MGNREGA) will be repealed and replaced by the new Act.    

It assured that the transition from MGNREGA to the new framework would be seamless and without disruption to workers.

"Ongoing works under MGNREGA as on June 30 shall be saved and carried over to the new framework seamlessly," the notification said, adding that existing e-KYC verified MGNREGA job cards will remain valid until the new "gramin rozgar guarantee cards" are issued.

Workers will not be denied employment due to pending e-KYC, and registration for those without job cards will continue at the gram panchayat level, it said.

The ministry further said that draft rules related to wage payments, grievance redressal, allocation norms and transitional provisions are being prepared in consultation with states and Union Territories and will soon be published for public consultation.

As per the new Act, every rural household whose adult members volunteer to do unskilled manual work will be entitled to 125 days of wage employment. If employment is not provided within the stipulated time, workers will be eligible for unemployment allowance. 

Payments will be made weekly or within 15 days from the closure of the muster roll, failing which workers will be entitled to delay compensation.

How states and UTs will receive fund

Northeastern and Himalayan states will receive funds in a 90:10 ratio (Centre:State), while other states and Union Territories with legislatures will follow a 60:40 sharing pattern. Union Territories without legislatures will get 100 per cent central funding.

The material component expenditure has been capped at 40 per cent at the district level. Under the earlier MGNREGA, the Centre bore 100 per cent of the wage cost, while the material component was shared in a 75:25 ratio between the Centre and the states.

The Centre said the allocation of Rs 95,692.31 crore for 2026-27 is the highest-ever Budget Estimate allocation for a rural employment programme. Including the likely contribution of states, the total programme outlay is expected to exceed Rs 1.51 lakh crore, it said.

Key highlights  of new Act

• 125 days guaranteed wage employment for rural households.

• Focus on water security, rural infrastructure, livelihoods, and climate resilience works.

• All works to be based on Viksit Gram Panchayat Plans.

• Face authentication attendance at worksites.

• No work during peak agricultural seasons.

• MGNREGA was repealed from July 1, 2026.

• Ongoing works to continue seamlessly.

• Existing job cards are valid until new cards are issued.

Funding Pattern

•  90 (central funding) :10 ( states) for Northeastern & Himalayan states.

• 60:40 for other states.

• 100% Central for UTs without legislature.

• Material costs capped at 40%.

Centre's view 

Shifts from demand-driven wage scheme to convergence-based development model.

Opposition parties concerns

• Dilution of rights-based guarantee.

• Digital barriers due to face authentication.

• Loss of work opportunities during peak farming seasons.

• New funding patterns are a burden to states as Under MGNREGS, 100 per cent of the wages were paid by the Centre, while the material cost would be shared 75:25 between the Centre and the states.