The Central government on Monday notified the implementation of a new rural labor law – Viksit Bharat – Rozgar and Ajeevika (Gramin) Mission Guarantee (VB-GRAMG), 2025 – which replaces the nearly two-decade-old Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA). The new law will come into effect across the country from July 1.
TVB-GRAMG was introduced in the Lok Sabha on 16 December 2025, passed by the Lok Sabha on 18 December, approved by the Rajya Sabha shortly after midnight on 19 December, and received presidential assent on 21 December 2025.
The MGNREGA Act, enacted in 2005, guarantees 100 days of paid employment to every rural family annually. Under this law, states submitted annual action plans on demand and the Center was bound to release funds accordingly. The new law changes the number of guaranteed working days and the way funds are allocated.
VB-GRAMG guarantees each eligible rural household up to 125 days of unskilled paid manual labor in a financial year – an increase of 25 days. Under the new funding model, the central government will set the state-level benchmark allocation – a fixed expenditure ceiling – for each financial year. Any expenses exceeding this ceiling must be borne by the state. The law did not specify the parameters for fixing these ceilings, indicating that the central government will determine them later through the rules.
Cost sharing follows a 60:40 formula between the Center and the states, with 90:10 for the northeastern and Himalayan states and full central funding for union territories without legislatures. Total annual spending is estimated at approximately $1.51 lakh crore, with the Center’s share expected to be around $95,700 crores.
While notifying the new law, the Ministry of Rural Development clarified that the existing MGNREGA job cards will remain valid until the new Gramin Rozgar guarantee cards are issued, but only for workers who have completed the e-KYC process.
Union Rural Development Minister Shivraj Singh Chouhan said: “The new law guarantees 125 days of work with wages paid directly to bank accounts within 15 days and compensation for any delay. States have had six months to prepare, and those that were not ready by July 1 will continue to be subject to VB-GRAMG funding rules from that date. This is a new dawn in the lives of workers and a milestone in building advanced villages as the foundation of a developed India.”
Congress leader Jairam Ramesh said: “The notification adds nothing new to what is already known – it is just another lazy, headline-grabbing exercise by a government that specializes in such exercises. If VB-GRAMG is to be implemented from July 1, all the operational details should be available by now. Public consultations with state governments should be conducted meaningfully, not just to complete a formality. The only guarantee that VB-GRAMG offers is extreme centralization and weakening of the bargaining power of rural workers. The constitutional right to work is The right to a wage for rural Indian families is being stolen.
