MGNREGA and the Viksit Bharat–G RAM G Act

For two decades, MGNREGA promised every rural household 100 days of paid work a year. On 1 July 2026, that promise changed hands to a new law.

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Indian Economy · IndEco0140

MGNREGA → VB–G RAM G

India’s rural work guarantee, from 2005 to its 2026 successor law

23 Aug 2005

NREGA is enacted, guaranteeing 100 days of rural wage work a year.

2 Feb 2006

The scheme is rolled out in 200 of India’s most backward districts first.

2009

NREGA is renamed MGNREGA, after Mahatma Gandhi, by amendment.

1 Jul 2026

MGNREGA is repealed. The VB–G RAM G Act, 2025 takes over, with a 125-day guarantee.

MGNREGA guarantee (2005-2026)100 days/year

VB–G RAM G guarantee (from 2026)125 days/year

FY 2026-27 central allocation₹95,692 crore

A Handover, Not a Gap

The government has framed the July 2026 change as a seamless transition, not a fresh start. Existing MGNREGA job cards stayed valid, and ongoing works simply carried over into the new law.

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Timeline

• 23 August 2005: The National Rural Employment Guarantee Act (NREGA) is enacted by Parliament, as Act No. 42 of 2005.
• 2 February 2006: The scheme is first rolled out, in 200 selected backward districts.
• 1 April 2007 – 1 April 2008: Coverage expands in two stages, to 130 more districts, then the remaining 285 districts.
• 2009: An amendment renames NREGA as the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA).
• 1 July 2026: MGNREGA is repealed. The Viksit Bharat – G RAM G Act, 2025 takes its place nationwide.

Must Know

• MGNREGA stood for the Mahatma Gandhi National Rural Employment Guarantee Act. It gave rural households a legal right to work, not just a welfare benefit.
• It was enacted in 2005, as the National Rural Employment Guarantee Act (NREGA). A 2009 amendment renamed it after Mahatma Gandhi.
• Until its 2026 repeal, MGNREGA guaranteed 100 days of unskilled wage employment, per rural household, per financial year.
• The scheme was administered by the Ministry of Rural Development, and implemented locally through Gram Panchayats.
• On 1 July 2026, MGNREGA was repealed and replaced by the VB–G RAM G Act, 2025. The new law raised the guarantee to 125 days.

Good to Know

• MGNREGA’s rollout happened in three phases. It started in 200 backward districts in 2006, added 130 more in 2007, then covered the remaining 285 districts by 2008.
• Central funding covered 100% of unskilled labour costs. It also covered 75% of skilled/semi-skilled labour and material costs, plus 6% of administrative costs. States bore the remainder.
• The scheme was demand-driven, not target-driven. Work had to be provided within 15 days of a request, or the applicant was owed an unemployment allowance instead.
• At least one-third of MGNREGA workers had to be women, by law, and men and women were paid equal wages for the same work.
• MGNREGA required regular social audits, where local communities themselves reviewed whether funds were actually spent as claimed. See Polity0043 — Social Audits for how this worked in practice.

Test Yourself

Please wait…

1. In which year was NREGA (later renamed MGNREGA) originally enacted?

2005

2009

1999

2014

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Great to Know

• MGNREGA was one of India’s first major rights-based welfare laws. Earlier poverty-alleviation schemes were mostly target-driven and discretionary, not a legal entitlement a citizen could demand.
• Its worksite rules, like mandatory drinking water, shade, and childcare facilities, reflected a “how,” not just a “what,” approach to welfare delivery. Good intentions on paper still needed workable conditions on the ground.
• The government has framed the 2026 shift to VB–G RAM G as continuity, not disruption. Existing job cards and ongoing works were carried over, so the underlying legal guarantee never actually lapsed, even as the law itself changed.
• The original MGNREGA is widely credited to economist Jean Drèze, who conceptualised and drafted it.

Current Affairs

• 21 July 2026: The government confirmed all States and Union Territories had notified their own VB-G RAM-G state schemes, and implementation was underway nationwide since 1 July 2026. Weekly review meetings continue between the Centre and States. (Source: PIB)
• 5 July 2026: Union Minister Shivraj Singh Chouhan released the first installment, called the “Mother Sanction,” of ₹25,863 crore to States, for VB-G-RAM-G’s implementation. (Source: PIB)
• The installment was released at a video conference with Rural Development Ministers of all States and UTs. Its purpose is ensuring States have adequate funds, so wages can be paid within 15 days. (Source: PIB)
• Chouhan noted that VB-G-RAM-G rolled out nationwide in a single day. MGNREGA, by contrast, took nearly three years to roll out across the country. (Source: PIB)
• Wage rates under the new Act have risen by around 10% on average. No State now has a wage rate below ₹300 a day. (Source: PIB)
• 1 July 2026: The VB–G RAM G Act, 2025 comes into force nationwide. MGNREGA, 2005 stands repealed the same day. (Source: PIB)
• 1 July 2026: Alongside the Act taking effect, the government notified revised wage rates for every State and UT. No notified daily wage anywhere in the country is now below ₹300. (Source: PIB)
• The national average notified wage rose from ₹298.8 a day to ₹327.4 a day, a jump of over 10%. Uttar Pradesh, Bihar, Jharkhand, West Bengal, Assam, Arunachal Pradesh, and Himachal Pradesh saw the steepest rises, 15-25%. (Source: PIB)
• 2 July 2026: A National Launch Programme for VB–G RAM G was held at Mukkavaripalle Village, Tirupati District, Andhra Pradesh. Union Minister Shivraj Singh Chouhan, AP CM N. Chandrababu Naidu, and Deputy CM Pawan Kalyan attended. (Source: PIB)
• The event featured the distribution of Rural Employment Guarantee Cards and the launch of the VB–G RAM G software platform. Beneficiaries also interacted directly with the visiting leaders. (Source: PIB)
• The new Act raises the guaranteed wage-employment entitlement. It now stands at 125 days per rural household, per financial year, up from 100 days. (Source: PIB)
• It also guarantees 25 of those days outside the 60-day peak agricultural season notified by the State. This specifically targets off-season rural unemployment. (Source: PIB)
• The Centre’s FY 2026–27 allocation is a record ₹95,692.31 crore. This is the highest-ever allocation at Budget Estimate stage for a rural employment programme. Including states’ share, the total outlay is expected to exceed ₹1.51 lakh crore. (Source: PIB)
• Funding is shared 90:10 for North-Eastern and Himalayan States, and for Union Territories. Other States and UTs with a legislature get a 60:40 share. (Source: PIB)
• Existing MGNREGA Job Cards remain valid under the new Act, until they are replaced by Gramin Rozgar Guarantee Cards. Workers without a job card can still register at the Gram Panchayat level. (Source: PIB)
• On 24 June 2026, ahead of the Act’s 1 July rollout, Rural Development Secretary Rohit Kansal chaired a high-level consultation. It covered its Draft Convergence Framework, with officers from 18 Ministries taking part. (Source: PIB)
• The framework centres on the Viksit Gram Panchayat Plan (VGPP). It follows a “Single Plan – Multi Funding” approach, aligning different schemes toward shared local outcomes. (Source: PIB)
• Gram Sabhas identify local priorities. Panchayati Raj Institutions then aggregate these, and match them to Central and State schemes. (Source: PIB)
• The Department also notified an interim list of 318 permissible works. These span four thematic areas: Water Security, Core Rural Infrastructure, Rural Livelihoods, and Extreme Weather Mitigation. (Source: PIB)
• 21 December 2025: The President gave assent to the VB–G RAM G Bill, 2025. Parliament had passed it two days earlier, on 18–19 December 2025. (Source: PIB)
• The wage revision also introduced a new ₹300 interim base wage rate, for the first time under a national rural employment programme. Before this, the lowest notified wage was ₹241 a day. (Source: PIB)
• Arunachal Pradesh and Nagaland got the largest percentage rise, nearly 24.5%. Higher-wage States were revised too: Haryana now pays ₹409, Goa ₹406, Kerala ₹401, and Sikkim’s high-altitude panchayats ₹450. (Source: PIB)
• On 31 July 2026, the government confirmed no VB-G RAM G dues are pending, for any State or UT. (Source: PIB)
• Mother Sanctions, as first-installment payouts, had reached ₹25,844.97 crore by 27 July. (Source: PIB)
• The Act also guarantees an unemployment allowance, if work isn’t offered on time. (Source: PIB)
• It also compensates workers, for any delay in wage payment. (Source: PIB)
• Covered works now span water security, rural infrastructure, livelihoods, and climate-resilience projects. (Source: PIB)
• On 28 July 2026, the government reported VB-G RAM G’s early performance. (Source: PIB)
• Over 99.5% of workers who sought work got it, generating 5.20 crore persondays, across 8.46 lakh worksites. (Source: PIB)
• Every Gram Panchayat must also prepare a Viksit Gram Panchayat Plan, under Section 16 of the Act. (Source: PIB)
• A GIS-based tool called Yuktdhara supports this planning, with geospatial data on local projects. (Source: PIB)
• Separately, the government detailed Lakhpati Didi’s progress. (Source: PIB)
• 10.08 crore rural households are now in 92 lakh Self-Help Groups nationwide. (Source: PIB)
• Of these, over 3.46 crore SHG members have become “Lakhpati Didis,” earning ₹1 lakh a year. (Source: PIB)
• On 24 July 2026, the government detailed VB-G RAM G’s wage-payment systems. (Source: PIB)
• A new National Electronic Fund Management System now credits wages directly, to workers’ bank accounts. (Source: PIB)
• Officers have also been deputed to States, to support the new Act’s rollout. (Source: PIB)