In a sweeping restructuring of India’s rural employment framework, the Centre on Monday announced that the Viksit Bharat – Guarantee for Rozgar and Ajeevika Mission (Gramin) Act, 2025, or VB–G RAM G Act, will come into effect nationwide from July 1, 2026, replacing the nearly two-decade-old Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA).
The Ministry of Rural Development described the move as a “historic transition” aimed at creating a more integrated, productivity-driven and future-oriented rural economy aligned with the government’s broader “Viksit Bharat @2047” vision.
“With the coming into force of the VB–G RAM G Act, the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA), 2005 shall stand repealed from the same date,” the ministry said in an official release.
Under the new legislation, rural households whose adult members volunteer for unskilled manual work will be legally entitled to 125 days of wage employment annually, up from the 100-day guarantee under MGNREGA. The Centre said the expanded entitlement was intended to strengthen livelihood security, improve rural incomes and accelerate development at the village level.
“Employment shall be provided to workers against their demand for work within the prescribed time frame, failing which workers shall remain entitled to unemployment allowance in accordance with the provisions of the Act,” the release stated.
The government also unveiled a record budget allocation of Rs 95,692.31 crore for the scheme in 2026–27, calling it the highest-ever Budget Estimate allocation for a rural employment programme. Including state contributions, the total outlay is expected to exceed Rs 1.51 lakh crore.
According to the ministry, the enhanced allocation is expected to generate large-scale rural employment while giving “fresh momentum to rural infrastructure development” and income enhancement initiatives.
The new framework will retain the Direct Benefit Transfer (DBT) mechanism for wage payments, with wages to be disbursed weekly or within 15 days after the closure of muster rolls. Workers will continue to be eligible for compensation in case of delayed payments.
“The Act places strong emphasis on timely and transparent wage payments,” the government said, adding that wages would continue to be deposited directly into workers’ bank or post office accounts.
Seeking to allay concerns regarding the transition from MGNREGA, the Centre assured that all ongoing works under the existing scheme would continue uninterrupted until June 30, 2026, and would subsequently be integrated into the new framework.
“In order to ensure seamless, smooth and worker-centric transition, employment under MGNREGA shall continue uninterrupted till the date of commencement of the new Act,” the ministry said.
The government further clarified that existing e-KYC verified MGNREGA job cards would remain valid until new Gramin Rozgar Guarantee Cards are issued under the VB–G RAM G framework. Workers without job cards would continue to be able to register through Gram Panchayats, and no worker would be denied employment due to pending e-KYC verification.
“Workers shall not be denied employment merely due to pending e-KYC,” the statement said, adding that verification support mechanisms would continue through state governments and local administrative bodies.
The Ministry of Rural Development said draft rules covering grievance redressal, administrative expenditure, unemployment allowance, wage payment norms, allocation parameters and the functioning of national-level steering and guarantee councils were currently being prepared in consultation with states and Union Territories.
The Centre said the transition provisions were being specifically designed to ensure continuity between MGNREGA and the new law and would soon be released for public consultation.
The VB–G RAM G Act forms part of the government’s broader rural transformation strategy, which seeks to position Gram Panchayats as the “central pillar of rural transformation” while linking wage employment with long-term rural asset creation, productivity enhancement and sustainable infrastructure development.
Enacted in 2005 during the UPA government, MGNREGA has been regarded as one of the world’s largest rural employment guarantee programmes. Over the years, it has played a significant role in supporting rural livelihoods, particularly during economic slowdowns, migration crises and the Covid-19 pandemic.
The Centre said the new legislation seeks to build upon that legacy while creating a more expansive rural employment ecosystem focused on self-reliance, productivity and sustainable village development across the country.