Employment Guarantee Has Slipped Into Limbo, Pg6

Key Highlights:

• Employment generation under the new Viksit Bharat–Guarantee for Rozgar and Ajeevika Mission (Gramin) alias VB-G RAM G Act saw a sharp decline in July 2026.
• The decline was over 40% in July 2026 compared to MGNREGA in July 2025, with an estimated 8.3 crore person-days.
• The transition from MGNREGA to VB-G RAM G Act officially began on July 1, 2026, after a period of confusion and delay.
• The first four months of the financial year 2026-27 (April-July) witnessed a 43% decline in employment generation compared to the average of the preceding two years.

VBGRAMG Act.jpg

Detailed Insights:

• The Ministry of Rural Development attributed the decline to some states suspending the act, an explanation deemed misleading by analysts.
• A Bill to replace MGNREGA with VB-G RAM G Act was passed in December 2025, with an initial target replacement date of April 1, 2026.
• The transition was delayed as the Ministry was not prepared, with draft rules for VB-G RAM G Act released for public consultation on May 22, 2026.
• During April-June 2026, confusion led to a significant lapse in work generation, particularly during the summer months which are typically peak periods for rural employment.
• The decline in employment was widespread across states, with 10 out of 19 major states experiencing a 60% to 85% reduction.
• States like Madhya Pradesh, Uttar Pradesh, and Jharkhand, among India's largest and poorest, saw employment generation virtually halt.
• The Union Budget 2026-27 allocated ₹95,692 crore for VB-G RAM G Act, with a projected total budget of ₹1.5 lakh crore including state contributions.
• Despite the enhanced budget, which was expected to increase employment, the initial months witnessed an unprecedented crash.
• Concerns remain regarding the materialization of the projected expenditure and potential issues with wage payments due to new conditions like facial recognition and Centre-State cost-sharing.

Key Concepts Involved:

• Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA): A social security measure guaranteeing the 'right to work' by providing 100 days of wage employment to rural households.
• Viksit Bharat–Guarantee for Rozgar and Ajeevika Mission (Gramin) alias VB-G RAM G Act: The successor to MGNREGA, aimed at continuing and enhancing rural employment generation and livelihood support.
• Person-days: A unit of work representing one person working for one day, used to measure employment generated under government schemes.
• Union Budget: The annual financial statement of the Government of India, detailing estimated receipts and expenditures for the upcoming fiscal year.