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Domestic legislative change

India Replaces MGNREGA with VB-G RAM G

Analysis based on 19 articles · First reported Dec 18, 2025 · Last updated Dec 22, 2025

Sentiment
20
Attention
4
Articles
19
Market Impact
General
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The replacement of the Mahatma Gandhi National Rural Employment Guarantee Act, 2005 with the Viksit Bharat Guarantee for Rozgar and Ajeevika Mission (Gramin) Bill, 2025, is a significant legislative change in India's rural employment framework. This could lead to shifts in government spending and resource allocation for rural development, potentially impacting companies involved in rural infrastructure and services. The increased guarantee of 125 days of wage employment per rural household may boost rural income and consumption, which could have a positive ripple effect on the broader Indian economy.

Government Rural Development

President Droupadi Murmu has given her assent to the Viksit Bharat Guarantee for Rozgar and Ajeevika Mission (Gramin) Bill, 2025, officially replacing the Mahatma Gandhi National Rural Employment Guarantee Act, 2005 (MGNREGA). The new law guarantees 125 days of wage employment per rural household per financial year, an increase from MGNREGA's 100 days. The India — Ministry of Rural Development stated that the VB-G RAM G Bill aims to establish a rural development framework aligned with the national vision of 'Viksit Bharat 2047', focusing on enhanced livelihood security, modernised governance, and the creation of durable rural assets. The bill was passed by both the India — Lok Sabha and India — Rajya Sabha amid strong protests from the India — Indian National Congress and other opposition parties, who criticized the removal of Mahatma Gandhi's name and the perceived financial burden on states. Rural Development Minister Shivraj Singh Chouhan defended the bill, asserting it addresses shortcomings in the old scheme and will bring transparency and accountability. The Act also mandates weekly or bi-weekly wage payments with delay compensation and outlines a 60:40 fund-sharing pattern between the Centre and states, with a 90:10 ratio for Northeastern and Himalayan states.

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The India — Ministry of Rural Development announced the presidential assent to the VB-G RAM G Bill, 2025, and described it as a decisive reform in India's rural employment and development framework.
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