NEW DELHI: As the VB-G RAM G Act, 2025, which replaces the two-decade-old Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA), is yet to be formally notified and brought into force, the Centre is considering a dual budgetary allocation in the upcoming Budget to ensure uninterrupted support to the scheme.
Officials said since the rules under the new legislation are still being framed, the government may provide funding simultaneously for both MGNREGA and the VB-G RAM G scheme during a transitional phase. The new law will be operationalised only after the rules are notified.
The move comes as the government plans to gradually phase out MGNREGA over the next six months while rolling out the new legislation. With the VB-G RAM G bill yet to come into force, the Centre is keen to avoid any disruption in wage employment for rural households.
Sources said during a recent meeting of a parliamentary panel, the government informed members that it is considering additional budgetary support and dual allocation to ensure a smooth transition to the VB-G RAM G.
Signalling a sharp jump in budgetary support, the government had earlier announced that Rs 1,51,282 crore would be allocated for VB-G RAM G. Sources said the Centre may further increase the outlay in its Budget announcement. MGNREGA was allotted an unchanged Rs 86,000 crore in both FY25 and FY26.
Under the new Act, the estimated Central share of funding is Rs 95,692.31 crore, with the states bearing the rest. The new Act mandates a 60:40 cost-sharing ratio between the Centre and the states. Opposition members have, however, raised concerns, saying that states remain in the dark over the proposed norms for allocation of funds.
Framing the rules
“After it is notified, states have to frame rules. It will take time. Even the BJP-ruled states are not going to come on board as the Act puts a huge financial burden,” said an Oppn leader.