At least three states have raised concerns regarding the financial burden of the Viksit Bharat-Guarantee for Rozgar and Aajeevika Mission (Gramin) (VB-G RAM G), a new rural employment program set to launch July 1. Under the new mandate, most states must cover 40% of program expenditures, a significant shift from the predecessor Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA), where the central government funded 100% of the wage bill.
The Union Rural Development Ministry disclosed these concerns following a Right to Information (RTI) application filed by Chakradhar Buddha of the National Campaign for People’s Right to Information (NCPRI). The ministry released responses from 13 states, revealing widespread apprehension regarding funding, wage structures, and a proposed 60-day non-working period during the peak agricultural season.
Did You Know? Under the previous MGNREGA model, states were only responsible for a portion of the material bill, which accounted for only 10% of the total budget, while the central government covered 100% of the wage bill.
Financial Strain on States
States are questioning the sustainability of the 40% cost-sharing requirement. Bihar, Madhya Pradesh, and Jharkhand explicitly requested a reconsideration of the funding pattern during consultations, according to government records. Analysis by the NREGA Sangharsh Morcha suggests that current interim allocations will fail to meet the government’s 125-day work guarantee. For example, while Madhya Pradesh is allocated funds covering 43 days of work, meeting the 125-day promise would require a total financial liability of ₹20,037 crore, far exceeding current provisions.
Objections to Program Provisions
Beyond funding, states challenged specific operational clauses of the VB-G RAM G. Five states, including Bihar and Jammu & Kashmir, demanded a wage hike, arguing that current rates—such as Bihar’s ₹255—are significantly lower than market conditions. Additionally, at least four states, including Punjab, Karnataka, and Telangana, objected to the 60-day blackout period. While the government claims this break ensures labor availability for farming, critics argue it weakens the bargaining power of rural workers.
Potential Future Developments
Given the explicit pushback from states, the program could face significant implementation hurdles following its July 1 launch. If the central government maintains the current funding structure, states may struggle to meet the 125-day work commitment, potentially leading to reduced employment opportunities for rural residents.
Frequently Asked Questions
What is the primary difference in funding between MGNREGA and the new VB-G RAM G program?
Under MGNREGA, the Centre bore 100% of the wage bill and the States had to pay only a part of the material bill, which accounted for only 10% of the total budget. Under the new VB-G RAM G, a majority of the States are required to bear 40% of the total expenditure.
Why are states concerned about the 60-day blackout period?
At least four states, including Punjab, Karnataka, and Telangana, have objected to the provision, which mandates a 60-day break during peak agricultural seasons. Critics argue this reduces the bargaining power of laborers.
Which states have explicitly asked for a reconsideration of the funding pattern?
Bihar, Madhya Pradesh, and Jharkhand were the three States that explicitly asked for a reconsideration of the proposed change in the funding pattern.