From MGNREGA to VB-G RAM G: Transition in Rural Employment

Syllabus: GS2/Governance; GS3/Employment

Context

• The transition from MGNREGA to VB-G RAM G has coincided with a sharp fall in rural employment generation, raising concerns over implementation, wage security and rural livelihoods.

About MGNREGA and VB-G RAM G

• MGNREGA, enacted in 2005, is a rights-based, demand-driven employment guarantee programme providing up to100 days of unskilled wage employment to rural households willing to undertake manual work.
  • It promotes livelihood security, women’s participation, Panchayati Raj institutions and creation of durable rural assets.
• VB-G RAM G represents the Union Government’s new framework for rural employment and livelihoods.
  • Its stated objective is to strengthen rural employment while integrating employment creation with infrastructure, livelihood promotion and the broader Viksit Bharat development vision.

Key Changes in the Transition

• The transition involves important changes in the design and financing of rural employment:
  • Higher employment guarantee: The new framework seeks to expand the guaranteed employment period beyond the MGNREGA framework.
  • Greater State participation: Unlike the predominantly Centre-funded MGNREGA wage-employment architecture, VB-G RAM G introduces greater Centre-State cost sharing.
  • Planning and convergence: Greater emphasis is placed on integrating employment works with rural infrastructure, agriculture, water management and livelihood assets.
  • Technology-based monitoring: Digital attendance, facial recognition and other technology-driven mechanisms are being emphasised for transparency and verification.
  • Revised wage framework: Wage rates have been separately notified under the new system.
• The transition was formally operationalised from July 1, 2026, following the framing of rules and associated notifications.

Significance of the Transition

• The reform can potentially improve rural employment policy in several ways:
  • Convergence: Employment expenditure can generate productive assets and strengthen rural infrastructure.
  • Livelihood diversification: Linking wage employment with agriculture, water conservation and allied activities may improve long-term income opportunities.
  • Fiscal predictability: A defined financing framework may improve budgetary planning.
  • Digital transparency: Technology can reduce ghost beneficiaries, duplicate attendance and leakages.
  • Viksit Bharat objective: Rural employment can be aligned with broader goals of inclusive growth, poverty reduction and resilient rural economies.
• Research supports the importance of employment guarantees as instruments of social protection, income smoothing, rural wage formation and women’s economic participation.

Related Issues and Concerns

• The immediate concern is the collapse in employment generation during the transition.
  • MGNREGA and VB-G RAM G together generated only about 70 crore person-days between April and July 2026, compared with 119–128 crore in the corresponding period of the preceding two years.
  • There is a decline of roughly 43% from the recent average.
• July 2026 witnessed a particularly sharp fall. Even if the final employment figure is around 9 crore person-days, employment would still be more than 40% below July 2025.
• The problem is especially severe in poorer States. In 10 of 19 major States, employment generation reportedly fell by 60–85%.
  • In Madhya Pradesh, Uttar Pradesh and Jharkhand, employment virtually came to a standstill during parts of April–July 2026.
• The Union Budget (2026–27) has allocated ₹95,692 crore for VB-G RAM G.
  • The overall resource envelope was expected to reach around ₹1.5 lakh crore, including State contributions, substantially higher than MGNREGA expenditure in 2025–26.
• Other major concerns include:
  • Implementation Disruption: Confusion over rules and opening of works undermined employment during the crucial summer lean season.
  • Centre-State Financing: Higher State contributions may constrain poorer States’ ability to generate employment.
  • Digital Exclusion: Facial recognition and technology-dependent attendance may exclude workers because of connectivity, authentication or technical failures.
  • Delayed Wage Payments: Administrative and technological bottlenecks could undermine the central promise of timely wage employment.
  • Inter-State Disparities: The decline has been especially severe in several large and poorer States.
  • Demand Suppression: If workers stop demanding employment because access becomes difficult, lower recorded employment may falsely appear as lower demand.

Efforts Related to Rural Employment

• Rural employment should be viewed as part of a wider policy ecosystem, including:
  • DAY-NRLM: Women’s self-help groups and rural livelihoods;
  • PM-KISAN: Income support to eligible farmer families;
  • PMAY-G: Rural housing and associated employment;
  • PMGSY: Rural road connectivity;
  • Skill India/PMKVY: Employability and skill development;
  • DDU-GKY: Skill training and placement for rural youth;
  • Watershed & Irrigation Programmes: Climate-resilient rural asset creation.

Way Forward: Strengthening Rural Employment in India

• The objective should not merely be to replace one scheme with another, but to preserve the rights-based employment guarantee while improving implementation.
• The government should ensure uninterrupted availability of employment during agricultural lean seasons and strengthen Gram Panchayat-level planning.
• Centre-State financing needs to be designed so that poorer States are not discouraged from providing employment.
• Technology should remain an enabler, not a barrier. Alternative authentication and offline mechanisms must be available.
• Wage payments should be timely, transparent and accompanied by effective grievance redressal.
• Social audits, Gram Sabha oversight, public disclosure of muster rolls and independent evaluation should remain central to accountability.

Source: TH