Govt changes NREG terms: States to pay, pause for farm work, Pg1

Key Highlights:

• The NDA government is proposing a new Bill to replace MGNREGA with the Viksit Bharat—Guarantee for Rozgar and Ajeevika Mission (Gramin) (VB—G RAM G) Bill, 2025.
• The proposed Bill increases the work demand to 125 days from the current 100 days for rural households.
• States will now bear 40% of the scheme's financial burden, a shift from the Centre footing 100% of wage costs for the past 20 years.
• The projected annual spending on the new scheme is Rs 1,51,282 crore, with states funding approximately Rs 55,590 crore.
• Guaranteed employment will not be available during peak agricultural seasons, with states notifying a 60-day period annually.

Detailed Insights:

• The MGNREGA, enacted in 2005, currently covers 8.61 crore families and 12.16 crore workers with job cards.
• The new Bill introduces 'normative' allocation, where the Centre determines state-wise allocation based on objective parameters, replacing the Labour Budget system.
• 11 north-eastern and hill states will contribute only 10% of the scheme's expenditure, while the Centre fully funds the scheme in the four Union Territories.
• In 2024-25, the total expenditure under MGNREGA was Rs 1.04 lakh crore, with wages accounting for Rs 73,337 crore and material costs at Rs 25,987 crore.
• The shift in financial responsibility could result in an additional fiscal burden of approximately Rs 30,000 crore annually for states, excluding West Bengal.
• The Bill aims to strengthen wage income assurance in view of socio-economic transformation in rural areas due to social security interventions and saturation-oriented implementation of government schemes.

Key Concepts Involved:

• MGNREGA: A rural job guarantee scheme providing 100 days of wage employment to rural households.
• Normative Allocation: A method where the central government determines fund allocation to states based on pre-defined criteria.
• Labour Budget: An estimate of anticipated demand for unskilled manual work submitted by states to the central government.