Why VB-G RAM G is reform without repair

The Union government’s Viksit Bharat – Guarantee for Rozgar and Aajeevika Mission (Gramin) Bill, 2025 (VB-G RAM G Bill, 2025) seeks to replace the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) with a rebranded and expanded framework. On paper, the promise looks generous: the statutory guarantee rises from 100 to 125 days, planning is folded into a futuristic architecture of geospatial mapping, digital dashboards and national infrastructure stacks, and the language of rights survives.

The harder question, however, is whether the Bill fixes the structural failures that have hollowed out MGNREGA in practice. On that count, the answer is uncomfortable. A close reading shows that the Bill often sidesteps well-documented problems and, in several places, codifies the very mechanisms that caused them.

One of MGNREGA’s longest-running failures has been the erosion of real wages. Multiple government committees and even the Supreme Court have noted that MGNREGA wages in many states fall below the statutory minimum wages.

There was no ambiguity about what needed to be fixed. The law needed to align wages with state minimum wages or shift the indexation to CPI-Rural, as recommended by the Mahendra Dev Committee. Clause 10 of the new Bill does neither. It retains the Centre’s absolute power to notify wage rates, without any statutory floor linked to minimum wages or real inflation. The programme remains an employer of last resort that offers below-market wages, rather than a wage floor that disciplines rural labour markets.

Payment delays have been the single-most corrosive feature of the MGNREGA implementation. A 2024 Parliamentary Standing Committee report traced the problem to the delayed release of funds by the Centre. The system operates like a post-paid plan: the states generate employment first and then wait for reimbursements, and when central allocations dry up mid-year, wages stop.

Experts have long proposed a revolving fund or pre-funded wallet model, where money is available before the work begins. The Bill ignores this entirely. Instead, Clause 22 entrenches a 60:40 Centre-state funding split for most states. This creates a double bottleneck, because even if the Centre releases its share on time, the workers will not be paid if a fiscally stressed state cannot release its portion. The design introduces an additional failure point into a system already known for delays.

Technology has been introduced into MGNREGA with the promise of transparency. In practice, it has produced large-scale exclusion. Independent research by LibTech India documents millions of workers struck off rolls or denied wages due to Aadhaar mismatches, biometric failures, and mobile app outages.

The core flaw was never technology itself; it was compulsion without fallback. What workers needed was a statutory right to non-digital alternatives when the systems failed. Clause 24 of the new Bill moves in the opposite direction. It hard-codes biometric authentication, real-time digital platforms, and geospatial monitoring into law. There is no protection for workers when the fingerprints do not match or when networks fail. By elevating technology mandates to statutory status, the Bill legalises exclusion rather than correcting it.

From a right to a rationed scheme

MGNREGA was conceived as a demand-driven entitlement. In practice, demand is routinely curtailed through administrative rationing. Local officials often stop accepting work applications once informal budget thresholds set by the Centre are reached, aware that crossing these limits exposes them to wage liabilities for which funds may never be released.

Instead of correcting this, the Bill formalises it and goes further. Clauses 4 and 22 introduce ‘normative allocations’ and explicitly state that any expenditure beyond the norm must be borne entirely by the state, while Clause 6 authorises a statutory pause of up to 60 days during peak agricultural seasons when no works can be undertaken. Together, these provisions create powerful incentives to suppress demand. Opening additional works now risks direct fiscal liability, and at certain times of the year, the guarantee itself can be suspended by design. What was earlier an informal cap has now become a legally sanctioned one, and the guarantee shifts quietly from open-ended to budget-bounded.

Social audits were intended to be MGNREGA’s accountability backbone. The report by the Comptroller and Auditor General (CAG), however, shows that social audit units were absent in several states and, where functional, they remained administratively dependent on the very departments they were tasked with auditing.

Clause 20 continues this arrangement. While the social audits are mandated, Clause 18 assigns responsibility for acting on audit findings to the Programme Officer, the very official who oversees the works and manages labour demand.

Taken together, these choices reveal the Bill’s true orientation. It is drafted to solve administrative and fiscal anxieties, not worker vulnerabilities. It seeks predictable budgets, managed labour supply during peak agricultural seasons, and technology-driven oversight, while offering little to address low wages, delayed payments, or digital exclusion.

The result is not a strengthened right to work. It is a managed labour supply scheme with a rights vocabulary. If rural employment is to remain a right rather than a rationed programme, these omissions will matter more than the new name or the extra 25 days on paper.

(The writer is a lawyer and public policy consultant)