The Centre plans to present a Bill that repeals the 2005 MGNREGA, replacing it with the Viksit Bharat Guarantee for Rozgar and Ajeevika Mission Gramin (VB-G RAM G). Although the government has pointed out an increase in guaranteed employment days from 100 to 125, critics argue that this apparent improvement conceals more profound structural changes that erode the foundational aspects of the rural employment safety net.
“End of the employment guarantee”
Nikhil Dey, a founding member of the Mazdoor Kisan Shakti Sangathan (MKSS) and the National Campaign for People’s Right to Information, described the Bill as an effective dismantling of the right-based framework that characterized MGNREGA.
“The most fundamental issue is that it signifies the end of the right to work as an employment guarantee,” Dey stated. “MGNREGA functioned because it was a nationally and centrally funded scheme that provided a universal entitlement to any rural citizen ready to undertake manual labor at minimum wages. That framework has been replaced.”
As per Dey, the proposed funding structure — which obligates most states to cover 40% of total costs, including labor — undermines the core of the scheme. Under MGNREGA, the Central government funded 100% of unskilled labor costs, a characteristic that ensured nationwide acceptance and uniform application.
“For most states, even the labor portion will now require state funding,” he remarked. “There’s no incentive for states to pursue this, and the ultimate victim will be the worker.”
Shift in fiscal responsibility
According to the new framework, all states apart from the North-Eastern and Himalayan regions and Jammu and Kashmir will adopt a 60:40 Centre–state funding ratio. Governments in the exempt regions will shoulder 10% of the costs.
Critics argue that this shift introduces fiscal uncertainty into a program intended to be demand-driven, especially during economic downturns. Dey cautioned that if states find it challenging to mobilize their portion of the funds, employment generation could diminish, irrespective of the increased number of guaranteed days.
“During every economic downturn, workers turn to this scheme for alternative employment,” he asserted. “If states cannot or choose not to provide the funding, no genuine guarantee will remain.”
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Opposition flags federal and fiscal risks
Congress spokesperson Sujata Paul raised concerns about the timing and motivations behind the proposed changes, emphasizing that they occur just before the next Finance Commission’s recommendations.
“Shifting 40% of the burden onto states — particularly poorer ones — is bound to result in problems,” Paul stated. “If the Centre genuinely aimed to strengthen the guarantee, it should have increased central allocations instead of transferring costs.”
Paul criticized the decision to rename the scheme, labeling it a politically symbolic act rather than a substantive policy change. “Every rupee spent on a name change is a rupee not invested in addressing core issues like delayed wage payments,” she noted, adding that the MGNREGA brand is deeply recognized and trusted by rural workers.
Beyond the headline numbers
While the government has emphasized the increase in guaranteed workdays, critics argue that the effectiveness of any guarantee relies on funding certainty and administrative flexibility. The Bill also suggests a shift from demand-based budgeting to fixed central allocations for states, a change that opposition leaders warn could further compromise responsiveness during crises.
For critics, the concern extends beyond funding ratios or nomenclature; it signifies a larger policy shift. “This is not a reform of MGNREGA,” Dey stated. “It is a repeal of the right to work and its replacement with a scheme that offers no enforceable guarantees.”
As the Bill is prepared for presentation in Parliament, the proposed transformation of India’s flagship rural employment program is poised to become a contentious issue — pitting the government’s vision of restructuring against warnings of a fundamental redrawing of the social and economic safety net for rural workers.
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Watch accompanying video for the entire discussion.
