Beyond the Name Change: What the VB-GRAMG Act Really Means for Rural Employment and Welfare

The recent reform of India’s rural employment guarantee framework has triggered sharp political reactions, with critics reducing the debate to a supposed attempt to erase Mahatma Gandhi’s name from the law. This framing misses the point entirely. The “Vikasit Bharat Guarantee for Rozgar And Ajeevika Mission (Gramin) Act” (VB-GRAMG Act) is not about symbolism; it is about reworking a two-decade-old social security instrument to better reflect India’s fiscal federalism, rural realities, and developmental priorities. The focus, therefore, must shift from nomenclature to substance.

Why the reform is not about abandoning Gandhi or the employment guarantee

The claim that the reform seeks to dispense with Mahatma Gandhi’s legacy is largely rhetorical. The earlier “Mahatma Gandhi National Rural Employment Guarantee Act” was designed to eliminate poverty and provide livelihood security — objectives that remain intact under VB-GRAMG. The legal guarantee of work, the entitlement to demand employment, and the provision of unemployment allowance if work is not provided within 15 days continue unchanged. What has been altered is the architecture of funding, planning, and monitoring.

Greater State contribution and the logic of cooperative federalism

One of the most debated changes is the increase in the States’ share of expenditure to 40%. Critics argue this will strain State finances and constrain the scheme. This concern ignores two important realities. First, Himalayan and North-Eastern States — 13 in total — will continue to receive 90% Central funding. Second, for other States, higher fiscal participation creates “skin in the game”, incentivising tighter implementation and reducing leakages that had plagued the earlier system.

Far from undermining federalism, this reform strengthens it. Social security is no longer treated as a purely Central responsibility but as a shared obligation, aligned with the constitutional vision of a cooperative Union.

From demand-driven to planned expenditure — without diluting the right to work

Another criticism targets the shift from a purely demand-driven model to a nominated expenditure framework. Civil society groups fear this will cap employment arbitrarily. However, the core guarantee remains untouched. Workers can still demand work, and States remain legally bound to provide it or pay unemployment allowance.

What changes is predictability. State-specific outlays based on detailed assessments of actual needs allow governments to plan better for lean agricultural months and periods of distress. This improves administrative efficiency without extinguishing workers’ rights.

Pausing work during peak farm seasons: employment versus agriculture

The provision allowing States to pause VB-GRAMG works for up to 60 days a year during peak sowing and harvesting seasons has also drawn criticism. In practice, this is a pragmatic correction. Rural employment schemes have often competed with agriculture for labour precisely when farmers need workers the most.

Aligning employment guarantees with agricultural cycles reduces labour shortages, supports timely farm operations, and ultimately protects farm incomes — a balance that earlier frameworks struggled to achieve.

Why water conservation sits at the heart of VB-GRAMG

Perhaps the most consequential shift is the focused prioritisation of four critical sectors, especially water conservation. India supports nearly 16% of the world’s population with just about 4% of global freshwater resources, and per capita water availability has been falling steadily.

Projects such as rainwater harvesting, desilting of ponds and reservoirs, and groundwater recharge directly address this structural vulnerability. In fact, concentrating VB-GRAMG works almost exclusively on water-related assets for a few years could yield measurable, long-term returns — both ecological and economic — by strengthening rural resilience.

Linking local works to national infrastructure planning

By integrating VB-GRAMG projects with the National Rural Infrastructure Stack and “PM Gati Shakti”, the reform attempts to break the siloed nature of rural works. Assets created under the scheme will be embedded in “Viksit Gram Panchayat Plans”, prepared through Gram Sabhas in a decentralised, participatory manner.

This convergence ensures that village-level priorities feed into national logistics and infrastructure planning, improving connectivity, lowering transaction costs, and facilitating labour mobility — benefits that extend well beyond wage employment.

Plugging leakages: digital systems and stronger social audits

Leakages were among the most persistent criticisms of MNREGA. While digital payments have already reached near-universal levels (over 99.9% in 2024–25), VB-GRAMG goes further. New measures include AI-based fraud detection, GPS-enabled monitoring, enhanced Panchayat oversight, weekly public disclosures, and Steering Oversight Committees at Central and State levels.

Most importantly, the mandate for stronger social audits twice a year could prove transformative. Two decades of operational experience have shown that community-led audits are often the most effective check against ghost workers, inflated muster rolls, and payment delays.

A social safety net, not a substitute for development

The extension of employment availability to 125 days a year reinforces VB-GRAMG’s role as a social security net during distress. But the reform also acknowledges a larger truth: no country can rely indefinitely on public works as its primary employment strategy.

The long-term policy challenge lies in formalising the workforce and creating higher-productivity, higher-wage jobs. In that sense, VB-GRAMG is not an endpoint but a bridge — providing immediate relief while India pushes toward the broader goal of a “Viksit Bharat@100”, where welfare, productivity and dignity of labour move in tandem.