While nationwide employment generation under the new Viksit Bharat – Guarantee for Rozgar and Ajeevika Mission (Gramin) has dropped by 56% in its initial phase, Telangana and Andhra Pradesh have reported significant growth. The shift from MGNREGA to this new program involves a change in funding models and rules, creating varied results across states.
The rural employment landscape in India is seeing a sharp divide. The new 'Viksit Bharat – Guarantee for Rozgar and Ajeevika Mission (Gramin)' (VB-G RAM G), which officially replaced MGNREGA on July 1, 2026, has faced a difficult start at the national level. Official data indicates a 56% drop in total employment, measured in person-days, across the country compared to the same period a year ago.
Amid this widespread decline, Telangana and Andhra Pradesh have emerged as clear outliers. Telangana reported a 135% surge in employment generation, reaching 36.99 lakh person-days in the recent period. Andhra Pradesh also performed well, recording a 54% increase to nearly 1.39 crore person-days. These states have managed to maintain or expand their employment numbers, unlike many others that have seen double-digit falls.
The Impact of New Funding Rules
The reason for this divergence lies in the structural changes brought by the new scheme. The VB-G RAM G program introduces a 60:40 Centre-state funding model. This means states must now contribute 40% of the funding, a significant shift from the previous MGNREGA framework, which was fully funded by the central government. This change places a direct financial responsibility on state budgets, which may be affecting how quickly and effectively individual states can roll out the program.
Transition Challenges and Policy Shifts
The sharp national downturn is also linked to transition frictions. Moving from one massive employment framework to another involves complex system migrations, which can cause temporary, yet severe, delays in implementation. Additionally, the new scheme includes a mandatory 60-day pause period during peak agricultural seasons. This rule is designed to ensure labour availability for farming but also limits when individuals can claim work under the program.
States that have not yet fully adapted their administrative systems to these new, tighter rules are seeing a sharp reduction in jobs provided. The difference in performance between states suggests that those with better-prepared, state-level implementation machinery are managing the transition more effectively than others.
For observers and policy analysts, the critical monitorable is the sustainability of this 60:40 funding model. If states struggle to manage the increased financial burden, it could lead to further uneven results in job creation. The ability of state governments to clear these implementation hurdles will determine if the national trend improves in the coming months.