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Government Repeals MGNREGA, Introduces New Rural Employment Act
The Union government has officially repealed the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA), a landmark social welfare legislation, and enacted the Viksit Bharat-Guarantee for Rozgar and Ajeevika Mission (Gramin) Act (VB-G RAM G) of 2025. This legislative shift occurred during the closing hours of Parliament’s winter session, marking a significant overhaul of India's rural employment guarantee scheme.
MGNREGA's Impact and Legacy
For nearly two decades, MGNREGA served as India's primary right-based rural employment program, guaranteeing 100 days of unskilled manual work per household. Assessments indicated its transformative effect, boosting rural employment from 21 million to 55 million person-days in its first decade. The program demonstrably improved food security, reduced rural migration by 57 percent, and aided households in coping with illness. It also facilitated the creation of substantial rural infrastructure, including paved roads, afforestation, and water conservation projects.
New Law Sparks Criticism
The new VB-G RAM G Act promises an extended guarantee of 125 days per household, aligning with the 'Viksit Bharat 2047' vision. However, policy experts and grassroots organizations have voiced strong objections. A primary concern is the shift from MGNREGA's universal, demand-driven architecture to a framework that grants the Centre greater control while transferring implementation risks to states, as noted by activists like Yogendra Yadav and Jean Drèze.
Funding Model and Federal Concerns
A contentious change is the revised funding split, moving from MGNREGA's 90:10 central-to-state ratio to a 60:40 split for most states. This revised clause is expected to disproportionately burden poorer states already facing financial constraints, potentially leading them to suppress work demand. Development economist Jayati Ghosh warns that the enhanced powers for the Centre could be weaponized against opposition-ruled states, posing risks to India's federal structure. The government's past suspension of wage payments in West Bengal, impacting 25 million workers, is cited as a precursor to such potential misuse.
'Switch-off Clause' Raises Alarms
The new legislation includes a 'switch-off clause,' which can halt work for up to 60 days during peak agricultural seasons. Trade unions argue this provision will diminish workers' bargaining power without ensuring alternative employment. Researchers caution that such exclusions could exacerbate inequality and drive increased migration from rural areas, undermining the very goals of rural development and income security.