The Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) has been formally replaced after President Droupadi Murmu gave her assent to the VBG RAM G Bill — Viksit Bharat–Guarantee for Employment and Livelihood Mission (Rural). With approval from the President, the bill passed by both Houses of Parliament has now become law.
The move has sparked sharp political debate, with the opposition staging widespread protests over the removal of Mahatma Gandhi’s name from the scheme. Opposition parties had demanded that the bill be referred to a Select Committee, citing concerns over its scope and intent, but the Centre rejected the proposal. Defending the legislation in Parliament, Union Minister Shivraj Singh Chouhan said the new law would play a vital role in strengthening welfare measures for the country’s poor.
The reform comes as MGNREGA, launched by the UPA government in 2005, completes 20 years. While the earlier scheme guaranteed 100 days of employment annually to rural households, the new law raises the guarantee to 125 days of work. It also mandates that wages be paid within 15 days of work completion, with provisions for unemployment allowance if payments are delayed.
Under the revamped framework, employment will be generated across four key sectors — water security, rural infrastructure, livelihood infrastructure, and disaster resilience. To enhance transparency and accountability, the scheme will adopt biometric authentication, geo-tagging, and multi-tier grievance redressal mechanisms.
A major shift has also been introduced in funding. While MGNREGA was fully funded by the Centre for unskilled labour wages, the new law mandates a 60:40 cost-sharing between the Centre and states. In Union Territories, the Centre will bear the entire cost. Northeastern and Himalayan states will contribute only 10 percent, with the remaining 90 percent funded by the Centre.
The new legislation marks one of the most significant changes to India’s rural employment policy in two decades, reshaping both its structure and financial framework amid intense political scrutiny.
