NEW DELHI, Dec 29 : India’s flagship rural employment programme is set for a major overhaul with the introduction of VB-G RAM G, a redesigned framework aimed at transforming the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) into a more outcome-oriented, transparent and participatory scheme, according to a latest research report by SBI Research.
The revamped model seeks to address long-standing structural weaknesses in MGNREGA by focusing on productive asset creation, better project identification, improved income generation and stronger monitoring mechanisms.
Central to the redesign is a “jan bhagidari” (people’s participation) approach, with Gram Panchayats placed at the core of planning, implementation and accountability.
Under VB-G RAM G, the guaranteed days of employment are proposed to rise from 100 to 125 days, while the nature of permissible works has been streamlined into four clearly defined categories: water security, core rural infrastructure, livelihood-related infrastructure and climate-resilient assets.
The programme will also introduce a 60-day pause during peak agricultural seasons, aligning rural employment with local economic cycles.
The fiscal commitment from the Centre is set to rise substantially. SBI Research estimates that the Central government’s assistance could reach nearly Rs 96,000 crore by FY27, underscoring continued priority to rural employment.
While the Centre-State funding ratio will shift to 60:40 (excluding northeastern, Himalayan states and union Territories, where it remains 90:10), the report argues that fears of fiscal stress on states are largely unfounded.
States, it notes, already receive around 55% of the Centre’s gross tax revenue through devolution and grants and have room to reorient spending towards productive rural assets.
A key feature of the new framework is normative allocation of funds based on objective criteria balancing equity and efficiency. It uses a simulated model with seven parameters, including work demand, rural population, women’s participation and asset creation.
SBI Research estimates that states could collectively gain around Rs 17,000 crore compared to average allocations over the past seven years, with most states emerging as net beneficiaries.
The redesigned scheme also promises major governance reforms. These include biometric authentication, spatial technology-based planning, digital monitoring, weekly public disclosures and strengthened social audits, all aimed at curbing leakages and improving efficiency.
Misappropriation under MGNREGA since FY16 has amounted to about Rs 292 crore, a gap the new structure seeks to narrow significantly.
VB-G RAM G is expected to boost employment and consumption by increasing average days of work per household, narrowing the gap between work demanded and work provided currently around 14% since FY20, and ensuring better wage alignment.
The report notes that despite a rise in nominal wages over the years, real wage growth has remained subdued, dampening demand for work.
Social inclusion remains a cornerstone. Women already account for around 58% of total person-days, while Scheduled Castes and Scheduled Tribes contribute close to 38%. The expanded scope of work under VB-G RAM G is expected to further strengthen participation from these groups.
Overall, SBI Research concludes that VB-G RAM G represents a decisive shift from a purely demand-driven welfare programme to a results-oriented rural development engine, integrating employment generation with durable asset creation, digital governance and grassroots participation, key pillars for achieving ‘Viksit Gram Panchayats’ and sustainable rural growth.
(UNI)
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