INTRODUCTION
India, the most populous country in the world, is, in spite of all the developments, home to a very large poor population. To reduce their poverty & uplift them from the grim margins of economic & social distress, the Government of India has consistently over time introduced numerous Employment Generation Schemes for achieving this purpose, some of which include the Pradhan Mantri Kaushal Vikas Yojana (PMKVY), Prime Minister’s Employment Generation Programme (PMEGP) & most importantly the erstwhile Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA).[1]
MGNREGA, a landmark effort towards rural employment & upliftment, was introduced in September 2005 to provide a legal guarantee to the unskilled labourers looking for work in rural areas at least 100 Days of paid labour, so that they can at least sustain themselves & their families fully.
However, this scheme has been recently replaced by Viksit Bharat—Guarantee for Rozgar and Ajeevika Mission (Gramin) Act, 2025.[2] It aims at providing at least 125 Days of paid work, restructuring of the cost sharing between the Centre & State Governments, while at the same time providing seasonal pauses & tech-driven monitoring.
The Act has stirred controversy on numerous accounts, like that of removing Mahatma Gandhi’s name, putting more burden on States & also the risk of exclusion of the majority of entitled people from the Scheme (due to their not being aware of the New Technology), etc.[3] This Blog aims to answer the questions that these things have raised, like does the Bill strengthen accountability and efficiency, or does it erode the rights‑based legacy that made MGNREGA a constitutional milestone?
HISTORICAL BACKGROUND: EVOLUTION OF MGNREGA
The experience of the Indian Poor remaining in extremely degrading conditions even after 30 years of Independence led the Central Government to devise various mechanisms to ensure that the conditions of the poor improve. This was done by introducing various schemes like JRY in 1989, SGRY in 2001, etc. Although the disastrous colonial effects of concentration of lands in the hands of a few & also the neglect of the rural economy, continued for a long time & which then led to increased demands by the people therein for their upliftment. This resulted in the MGNREGA Act being enacted by the Government in 2005.[4] It was created with the idea of creating safety nets for rural people & also ensuring that their survival is not endangered by any means.
The Ministry of Rural Development, a section of the Government of India’s economic bureau, was in charge of overseeing the implementation and rollout of the plan. Gram Panchayats – governing heads in rural villages- were the envoys for implementing the scheme at the local level.
Its legacy has been defined by its strict commitment to ensuring various rights to these people, like the Right To Work, Adequate Livelihood, Time-bound Payment of Wages, Unemployment Allowance for the period without work. This was further highlighted by various Judicial Decisions, like the most famous Swaraj Abhiyan vs Union of India Case of 2016[5], wherein the court reinforced the accountability of both the Central & State Govts. in the enforcement of welfare schemes as well as disaster management, thus exemplifying the significance of the MGNREGA.
LEGAL ADVANCES: SALIENT FEATURES OF THE VB-G RAM G ACT
The VB-G RAM G ACT, 2025 was enacted by the Central Government in December 2025 & it replaced the MGNREGA, 2005. The rationale given behind the decision that the Government put forth was that there is a need to restructure the provision of employment guarantee, along with the creation of beneficial assets for the Country. The various features of this Act include:
- To provide wage employment for at least 125 Days to those rural people looking for work.
- It aligns rural employment guarantee with national growth priorities.
- It restructures the funding structure of the projects undertaken under the scheme from 100% Central Govt. funded to a 60:40 cost-sharing system. This shift from a central sector scheme to a centrally sponsored framework reflects the inherently local nature of rural employment and asset creation. Under the new architecture, states share both cost and responsibility through a normative allocation framework, creating stronger incentives for effective implementation and preventing misuse.
It replaced MGNREGA to reduce various problems in the Act, like:
- Ineffective Asset Creation would be reduced by the construction of productive assets like Water Security & Core Infrastructure.
- Addressing the problem of Labour Shortage in Agricultural Peak Season due to their engagement in MGNREGA works by introducing Seasonal Pauses.
- Ensuring Fiscal Balance by ensuring that the responsibility is shared by both levels of Government.
Its proponents have highlighted its various benefits as follows:
- Increase in the Time Period of Employment Guarantee from 100 to 125 Days.
- Faster Wage Payments with weekly pay enshrined as opposed to the earlier 15-day period.
- Its feature of Seasonal Pauses aims at providing support to the Agricultural System of India.
Its critics argue that it erodes the Legacy of the MGNREGA ACT in the following ways:
- Dilution of Labour Rights from guaranteed work being a ‘Justiciable Right’ to a ‘Schematic Entitlement’.
- Increasing Financial Burden on States due to the restructuring of cost-sharing.
- Its Normative Model has also led to it being termed as a tool of power centralisation.[6]
LEGAL CHALLENGES: IMPACT ON THE LEGACY OF MGNREGA
The VB-G RAM G ACT, 2025 has impacted the Legacy of the erstwhile MGNREGA Act, 2005 in both positive & negative ways. Some of the ways by which it has shown its impact are as under:
- While increasing the no. of days of guaranteed work from 100 to 125 days was a welcome step, it also includes the provision of ‘budgetary caps’ whereby the enforcement of justiciable rights became the subject of availability of funds which undermines various human rights like the Right to Livelihood, which was included under Right to Life (Article 21) by the Supreme Court through its landmark judgement in the Olga Tellis v Bombay Municipal Corporation (1985) case.[7]
- While retaining the authority of Gram Panchayats, it transformed their work from being decentralised to a more centrally & technically controlled system of networks, which has created conflicts between the provisions enshrined in the Constitution & those being applied by the Central Government.
- While ensuring digitization of the entire process of employment generation, it has led to strong fears of exclusion of those labourers who are unaware of the Technology, which can deter their opportunities of earning their livelihood & violate their Fundamental Rights.
Keeping all these factors in mind, it has been highlighted by numerous scholars that the new Act has completely reshaped the Legacy of the MGNREGA ACT by changing its various core features, both for positive & negative consequences.[8]
CONCLUSION: FUTURE OF RIGHTS-BASED EMPLOYMENT GUARANTEES
We can’t afford to look back on the MGNREGA Act, which has now become part of history. Rather, we should now focus on the Way Forward with the new VB-G G RAM G ACT & how it can be used to make the life of the Underprivileged Section of the Society better. The Financial Burden on States should be reduced by formulating a Hybrid Funding Mechanism wherein, in times of emergencies, the Central Government helps the State Governments in payment of wages of Labourers. There should be a Review of the Process of Seasonal Pauses in a manner that, on one hand, protects the Labour Rights while on the other, allows Agriculture to also flourish. To ensure Transparency & Accountability of the Gram Sabhas, a Strong & Structured Audit System should be developed so that actions come along with responsibilities. States must also be provided Time-to-Time Grants or Financial Assistance by the Central Government so that they can successfully bear the additional burden on their exchequer without putting additional pressure on the Citizens. All this will allow the Act to act as per the purpose for which it has been enacted & also lead to the conditions of the Vulnerable Sections of Indian Society getting better.
Author(s) Name: Mohammad Yasir Bhat (University of Kashmir)
References:
[1] Viji, ‘Employment Generation Schemes/Programmes of Government of India’ (Vikaspedia, 22 July 2025) <https://schemes.vikaspedia.in/viewcontent/schemesall/schemes-for-unemployed-and-poor/employment-generation-schemes-programmes-of-government-of-india?lgn=en> accessed 23 December 2025
[2] Viksit Bharat-Guarantee for Rozgar and Ajeevika Mission (Gramin) Act 2025
[3] Zoya Hasan, ‘From Gandhi to VB-G RAM G: More than a Name Change, a Dismantling of the Right to Work’ (The Wire, 17 December 2025) <https://m.thewire.in/article/government/from-gandhi-to-vb-g-ram-g-more-than-a-name-change-a-dismantling-of-the-right-to-work#:~:text=What%20might%20seem%20like%20a,Demand%2Ddriven%20to%20discretionary%20logic> accessed 28 January 2026
[4] Mahatma Gandhi National Rural Employment Guarantee Act 2005
[5] Swaraj Abhiyan v Union of India And ors. (2016) AIR SC 2929
[6] Mangesh Patole, ‘VB-G RAM G Bill, 2025: A Comparative Overview with MGNREGA’ (PMF IAS, 17 December 2025) <https://www.pmfias.com/vb-g-ram-g-bill-2025/> accessed 23 December 2025
[7] Olga Tellis & Ors. v Bombay Municipal Corporation & Ors. (1985) SCR SUPP (2) 51
[8] Vajiram Mains Team, ‘VB–G RAM G Bill 2025 Explained: How It Replaces MGNREGA’ (Vajiram & Ravi, 16 December 2025) <https://vajiramandravi.com/current-affairs/vb-g-ram-g-bill-2025-explained-how-it-replaces-mgnrega/#rationale-behind-the-proposed-overhaul-of-mgnrega> accessed 28 January 2026
