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4mo ago

New VB‑G RAM G Law Replacing MGNREGA Sets Off Political Fight and Poses Rollout Hurdles

The overhaul shifts costs to states through a 60:40 formula, converting the guarantee to centrally set allocations with a seasonal pause.

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The Himachal Pradesh Congress Committee on Monday staged a protest against the central government, alleging that the move to change the name of the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) and alter its framework would weaken the scheme’s original objectives. (Deepak Sansta)
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Overview

  • Following presidential assent, Congress launched protests and set a December 27 Working Committee meeting to plan a repeal agitation.
  • The government and BJP defended the law as an upgrade to 125 guaranteed workdays with stronger payment safeguards and asset-focused projects, with Amitabh Kant citing changed rural realities.
  • The Act allows up to 60 days of paused work during sowing and harvesting, replaces demand-driven labour budgets with central normative allocations, and raises penalties.
  • Funding moves to 60:40 for most states and 90:10 for northeastern and Himalayan states, with an estimated Rs 1.51 lakh crore annual outlay and about Rs 95,692 crore from the Centre; analyses project a state burden increase of over Rs 30,000 crore.
  • Implementation questions include a six-month transition, clearing MGNREGA liabilities, state readiness under higher cost shares, how allocations will be set, and administrative expenses rising to 9%.