The debate around the reform of India’s rural employment guarantee scheme has, somewhat misleadingly, been reduced to a question of nomenclature. Critics have framed the new legislation as an attempt to erase Mahatma Gandhi’s name from public policy. This focus misses the substantive shift introduced by the Vikasit Bharat Guarantee for Rozgar and Ajeevika Mission (Gramin) Act (VB-G RAM G Act). The real story lies not in symbolism, but in how the redesign seeks to respond to fiscal realities, federal balance, climate stress, and two decades of implementation lessons from Mahatma Gandhi National Rural Employment Guarantee Act.
Why the reform is not about symbolism
The rural employment guarantee remains intact in spirit and in law. The right of workers to demand employment, and the obligation of the State to provide work or pay unemployment allowance within 15 days, has not been diluted. Framing the reform as an ideological exercise obscures the more important question: can the programme be made more effective, accountable, and better aligned with today’s rural economy?
Rebalancing Centre–State fiscal responsibility
One of the most debated changes is the increase in the States’ contribution to 40 per cent of scheme expenditure. Fears that this will cripple implementation overlook two important safeguards. First, Himalayan and North Eastern states continue to receive 90 per cent central funding. Second, for other states, higher fiscal participation creates stronger incentives to curb leakages and ensure quality outcomes.
This shift reflects a deeper federal logic: rural employment is not merely a centrally delivered welfare measure, but a shared responsibility. Greater State “skin in the game” is intended to improve ownership, monitoring, and responsiveness to local labour-market conditions.
From open-ended demand to planned expenditure
The transition from a purely demand-driven framework to a nominated expenditure format has drawn criticism from civil society groups. However, the legal guarantee itself remains unchanged. What changes is predictability. Annual state-wise outlays, determined through assessments of actual need, allow governments to plan more effectively for lean agricultural months when rural distress peaks.
Equally significant is the provision allowing states to pause implementation for up to 60 days during peak sowing and harvesting seasons. This acknowledges a long-standing tension between farm labour requirements and public works, helping farmers manage labour shortages without undermining workers’ income security over the year.
Climate stress and the turn to water security
Perhaps the most consequential redesign is the sharper focus on climate-resilient infrastructure. India supports nearly 16 per cent of the world’s population with only about 4 per cent of global freshwater resources. Per capita water availability has been steadily declining, making water conservation a development priority.
By prioritising rainwater harvesting, pond and reservoir rejuvenation, dredging, and allied water-conservation works, VB-G RAM G aligns employment generation with long-term ecological returns. Concentrating scheme resources on water security over the next few years could yield durable, measurable benefits for agriculture, livelihoods, and climate resilience.
Converging local plans with national infrastructure goals
A key institutional innovation is the integration of VB-G RAM G works with the National Rural Infrastructure Stack and “”. Projects will be embedded within Viksit Gram Panchayat Plans, prepared bottom-up through Gram Sabhas.
This approach seeks to resolve a long-standing disconnect: locally chosen works often failed to align with broader logistics and infrastructure networks. Convergence ensures that rural assets contribute not only to immediate employment, but also to lower transport costs, improved market access, and enhanced labour mobility.
Digital monitoring and the push to eliminate leakages
After nearly twenty years of operational experience, the reform incorporates lessons from persistent implementation failures. With over 99.9 per cent of payments already digitised, the new Act strengthens oversight through multiple layers: Steering Oversight Committees, dedicated programme officers, AI-based fraud detection, GPS-enabled monitoring, enhanced Panchayat supervision, and weekly public disclosures.
Most notably, social audits are now mandated twice a year. This institutionalises community scrutiny, long recognised as the most effective tool for detecting fake muster rolls, inflated work claims, and payment delays.
Employment guarantee versus long-term transformation
The extension of permissible employment to 125 days a year reinforces VB-G RAM G as a social security net during distress. At the same time, policymakers underline that such schemes cannot substitute for the larger goal of workforce formalisation and higher-productivity employment.
The challenge ahead is to ensure that rural employment guarantees cushion vulnerability without becoming permanent substitutes for structural transformation. In that sense, VB-G RAM G is best seen as a transitional instrument — providing security while India works towards the broader objective of a Viksit Bharat by its centenary.
What to note for Prelims?
- Key changes introduced under the VB-G RAM G Act
- Revised Centre–State funding pattern
- Focus on water conservation and climate-resilient works
- Integration with PM Gati Shakti and rural infrastructure planning
What to note for Mains?
- Federalism and shared responsibility in welfare delivery
- Balancing employment guarantees with agricultural labour needs
- Role of digital governance and social audits in reducing leakages
- Limits of employment schemes in achieving long-term structural transformation
