From July 1, the Mahatma Gandhi National Rural Employment Guarantee Act, 2005, has been replaced by the Viksit Bharat-Guarantee for Rozgar and Ajeevika Mission (Gramin) Act, 2025 (VB-G RAM G). The new Act will govern India's rural employment guarantee scheme, with the Union government allocating Rs 95,692.31 crore for it in the 2026-27 financial year.
The new law raises guaranteed wage-employment from 100 to 125 days a year. It also includes a 60-day pause during peak sowing and harvesting seasons, to keep farm labour available during those periods.
The bigger change is in funding. Under MGNREGA, the Union government paid the entire wage bill. Under VB-G RAM G, most states will now bear 40% of the cost, with the Union covering 90% in Northeastern and Himalayan states and Union Territories with a legislature, and the full cost in UTs without one. Central allocations to states, earlier based on state labour budgets, will now be decided top-down by the Union government, using the 16th Finance Commission's devolution formula.
Existing MGNREGA job cards will remain valid, but will need to be renewed and e-KYC verified. This is until states issue new Gramin Rozgar Guarantee Cards under the new law. These cards will be valid for three years. Special cards, in a distinct colour, will be made available for single women, persons with disabilities, people above 60 years of age, released bonded labourers, Particularly Vulnerable Tribal Group members, and transgender persons.
At least three states, which include Bihar, Madhya Pradesh, and Jharkhand–two of them BJP-ruled–have formally objected to the 60:40 cost-sharing pattern, according to an RTI reply obtained by Chakradhar Buddha of the National Campaign for People's Right to Information and reported by The Hindu.
The interim allocation under VB-G RAM G for Bihar has been set at Rs 4,477 crore. However, according to an analysis by NREGA Sangharsha Morcha, this allocation is inadequate to fund the promised 125 days of work. To meet that commitment, the analysis found, Bihar would need Rs 15,939 crore. The Rs 4,168 crore allocated to Madhya Pradesh covers only 43 days of work, and meeting 125 days would require Rs 20,037 crore. Jharkhand has been allocated Rs 1,804 crore, which covers just 41 days, against a 125-day liability of Rs 9,293 crore. Of the three, only Jharkhand said explicitly, during post-legislative consultations, that bearing the 40% share would be difficult.
The Union Rural Development Ministry's RTI response covered 13 states in all. Five sought revisions to wage rates, arguing that MGNREGA wages already lag behind market rates. Four objected to the 60-day seasonal work suspension. Most flagged delays in wage and material payments, and asked for timely clearance of dues.
Even states under the more favourable 90:10 funding pattern raised concerns. For instance, Uttarakhand cited terrain-related costs and asked that the Union government continue funding 100% of wages.
The new wage rates
Alongside the VB-G RAM G Act, the Union government notified a Rs 300 daily floor wage. Twenty-one states and UTs that were paying below Rs 300 under MGNREGA have been brought up to that level; those already above it saw smaller increases.
The steepest hikes were in Uttar Pradesh (+Rs 48), Bihar (+Rs 45), Madhya Pradesh (+Rs 39), Rajasthan (+Rs 19).
Arunachal Pradesh, Nagaland, Himachal Pradesh, Uttarakhand, Jharkhand, Assam, Tripura, Sikkim, and West Bengal also saw increases above 15% to reach the new Rs 300 floor wage, along with Gujarat, Manipur, Mizoram, Odisha, Jammu and Kashmir, Ladakh, Meghalaya, and Chhattisgarh.
Southern states saw much smaller rises. Karnataka's wage rose Rs 12, from Rs 370 to Rs 382. Tamil Nadu's rose by Rs 9, to Rs 345. Andhra Pradesh's rose Rs 5, to Rs 312. A Rs 5 increase was seen in Maharashtra too, which now stands at Rs 317.
Telangana's wage rose by just Rs 1, from Rs 307 to Rs 308, the smallest increase among revised states; wages in the Union Territory of Dadra and Nagar Haveli and Daman and Diu, at Rs 340, were left unchanged.
Haryana remains the highest at Rs 409, despite the lowest percentage hike of any state, at 2.25%, followed by Goa (Rs 406) and Kerala (Rs 401). Certain panchayats in Sikkim pay a special rate of Rs 450.
Congress leader and former Rural Development minister Jairam Ramesh called the new wages "unjustifiably low," reiterating the party's 2024 campaign demand for a Rs 400 national minimum wage covering MGNREGA workers.