Why VB–GRAMG is a regressive reform
The Viksit Bharat—Guarantee for Rozgar and Ajeevika Mission (Gramin) or VB–GRAMG is not just a renaming of the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA); it carries far-reaching implications that have been widely reported in the media. This story focuses on how the Parliamentary Standing Committee had recommended several reformative measures to strengthen MGNREGA on wages, working days, fiscal burden, and more while the new bill introduces regressive changes, effectively undermining many of the scheme’s progressive safeguards.
Employment Days: Bill stops short of panel’s push for expansion
The only notable positive in the VB–GRAMG Bill is its proposal to revise the employment guarantees under MGNREGA by increasing the cap to 125 days of guaranteed employment per household, However, this falls short of the recommendations made by Parliament’s own Standing Committee.
A Parliamentary Standing Committee report tabled on March 12, 2025, called for a more ambitious expansion of the scheme. Describing it as the “need of the hour,” the Committee recommended diversifying the nature of works under MGNREGA and increasing the guaranteed days of employment from the current 100 days to at least 150 days per household. The Committee also urged the Department of Rural Development to comprehensively review the scheme to better address rural distress.
Wages: Bill silent on inflation, committees flag long-standing crisis
The VB–GRAMG Bill empowers the Centre to notify a uniform wage rate for all unskilled manual work under MGNREGA but remains silent on the mechanism for periodic wage revision or inflation indexation. By not specifying how wages will be adjusted to reflect rising prices, the provision raises concerns about wage stagnation and erosion of real incomes for rural workers, particularly in a scheme intended to serve as a social safety net.
An analysis by Hindu BusinessLine showed that between FY20 and FY25, MGNREGA wages rose by only 30 per cent, continuing to lag behind prevailing agricultural wages. Parliamentary Standing Committee reports have repeatedly flagged this gap, noting that MGNREGA wages are inadequate and not aligned with the rising cost of living.
Successive expert committees have examined the issue without resulting policy change. A 2013 panel led by economist S Mahendra Dev recommended linking MGNREGA wages to state minimum wages, but the proposal was not accepted. A subsequent committee headed by Nagesh Singh rejected this linkage and suggested shifting indexation from CPI-AL to CPI-R, a move that was ultimately not adopted, with the government continuing to rely on CPI-AL. In December 2022, yet another committee chaired by former Rural Development Secretary Amarjeet Sinha was constituted to study costs and governance issues.
The Parliamentary Standing Committee, in its report tabled to Parliament in February 2024, flagged wage revision as a long-standing and unresolved issue, pointing to persistent disparities across states and Union territories. The Committee stressed the need for a balanced and pragmatic approach to wage setting that accounts for the rising cost of living and rural economic conditions. It also questioned the continued linkage of MGNREGA wages to the Consumer Price Index for Agricultural Labourers (CPI-AL), arguing that the index fails to capture actual inflation faced by workers, and recommended an urgent review of the wage calculation method to better reflect ground realities.
Wage revision has been a pressing issue since NREGA was launched in 2005. Numerous committees have been set up over the years, but a suitable solution has yet to be implemented. The VB–GRAMG Bill does not address this longstanding concern at all.
Government acknowledges panel’s recommendations, implementation pending
In a written reply to a question by MP Shri Golla Baburao in Parliament on August 8, 2025, the Union government acknowledged that the Department-related Parliamentary Standing Committee on Rural Development and Panchayati Raj has made recommendations on revising MGNREGA wage rates and increasing the number of guaranteed working days. The admission places the government on record as being aware of the Committee’s proposals, even as several of its key recommendations particularly on wages and expanding employment days remain unimplemented in VB–GRAMG Bill.
Fiscal sharing: Bill shifts burden to states, panel seeks higher central role
The VB–GRAMG Bill proposes a new fund-sharing pattern between the Centre and the states. Under it, the central government will bear 90 per cent of the costs for North Eastern and Himalayan States and Union Territories, while all other states and Union territories with legislatures will follow a 60:40 sharing ratio. The goal is to reduce the Union government’s fiscal burden by passing a larger share of expenditure to the states.
According to the Bill’s Fiscal Memorandum, the total estimated annual cost of implementing the scheme nationwide including wages, materials, and administrative expenses would be Rs 1,51,282 crore, with the central share estimated at Rs 95,692.31 crore. According to this memorandum, the fiscal burden on the states will be huge around Rs 56,000 crore.
NREGA Sangharsh Morcha in their statement write: “This clause not only puts a massive burden on states, but also disproportionately impacts poorer and high migrant-sending states which are more in need of rural employment. The increased financial burden will lead to states resorting to fiscal conservatives and not registering workers’ demand for work.”
In contrast, a Parliamentary Standing Committee in its report which was tabled in august 2025 has called on the Centre to take on a larger fiscal responsibility for MGNREGA. The Committee expressed concern that the Budget Estimates for 2025-26 have remained unchanged at Rs 86,000 crore since 2023-24, despite high demand for work. It stressed that MGNREGA is a demand-driven scheme and a critical safety net for the most economically disadvantaged rural households, particularly during crises like the COVID-19 pandemic. The Committee recommended that the Department of Rural Development assess actual employment demand and press the Union Ministry of Finance for higher allocations, warning that insufficient central funding could undermine the effective delivery of this vital programme.
While the Standing Committee urged the Union Ministry of Rural Development to press the finance ministry for higher allocations to meet rising demand, the Bill instead shifts a significant portion of the financial burden to the states.
Demand-driven to supply-driven
According to the VB–GRAMG Bill, the central government shall determine the state-wise normative allocation for each financial year, based on objective parameters as may be prescribed by the central government. It also gives the Centre the power to select rural areas in each state where work will be provided. Additionally, to ensure sufficient availability of agricultural labour during peak farming seasons, the Bill states that no work under this Act shall be started or carried out during those periods. All these provisions make the VB–GRAMG supply-driven scheme and not demand-driven.
The International Labour Organization (ILO) cites a research paper, “With more low-paid workers joining MGNREGA, there has been a shortage of labour in agricultural work in some places, thereby creating an opportunity for workers to demand better wages in the agricultural sector and to improve their incomes.” This highlights an important ripple effect of the scheme: even those who do not directly work under MGNREGA benefit. By providing a guaranteed employment alternative, the programme strengthens the bargaining power of rural workers, particularly landless agricultural labourers, enabling them to secure higher wages and better income opportunities in the broader labour market.
Under the proposed changes to MGNREGA, no work will be provided during peak agricultural seasons to ensure labour availability for farming. While intended to support crop production, this shift could weaken the bargaining power of landless agricultural labourers, who would then be dependent on landlords for wages during these months.
Technology reliance: Transparency vs Exclusion
The Bill mandates daily biometric attendance at MGNREGA worksites through authorised personnel, with attendance records to be uploaded and made publicly accessible on a designated management information system. The provision seeks to strengthen transparency and monitoring through technology-driven oversight, making digital attendance a compulsory component of programme implementation across rural worksites.
However, a Parliamentary Standing Committee report dated April 2025 has flagged serious concerns over the reliability of the technology currently used for attendance tracking. In its report, the Committee noted that the National Mobile Monitoring System (NMMS) App, introduced in May 2021 to record attendance using twice-daily geo-tagged photographs, has suffered repeated failures, particularly in offline mode. Given poor network connectivity in many rural areas, these technical shortcomings have led to wage delays and denials, undermining workers’ entitlements.
The Standing Committee of Parliament cautioned against penalising workers for system failures and strongly recommended that the use of NMMS for attendance capture be put on hold until all technical glitches are fully resolved. It stressed the urgent need to develop a stable offline mode to ensure that technology enhances transparency without becoming a barrier to wage payments, highlighting a clear divergence between the Bill’s technology-heavy approach and the panel’s ground-level assessment.
Conclusion
VB–GRAMG shifts MGNREGA from a demand-driven scheme to a more rigid, supply-driven model. It ignores inflation-linked wage revisions and shifts fiscal responsibility to states. Restrictions during peak agricultural seasons and reliance on unreliable technology could further hurt rural workers. In contrast, the Parliamentary Standing Committee recommended expanding work, ensuring fair wages, and maintaining strong central funding. The Bill’s provisions risk weakening the scheme, while the Committee’s vision shows the path to genuinely strengthen employment guarantees and protect rural livelihoods.
Suchak Patel is an independent journalist
Views expressed are the author’s own and don’t necessarily reflect those of Down To Earth