In MGNREGA shadow, why G RAM G Act may face a bumpy road ahead, Pg9

Key Highlights:

• The Viksit Bharat-Guarantee for Rozgar and Ajeevika Mission (Gramin) or VB-G RAM G Act 2025 has been enacted, repealing the MGNREGA.
• The G RAM G Act introduces a 60-day pause on work and alters the funding pattern between the Centre and the States.
• The funding ratio for northeastern and hilly states/UTs is 90:10 (Centre:State), and for other states/UTs with legislature, it is 60:40.
• The estimated annual expenditure on the new scheme is around Rs 1,51,282 crore, with the Central share being Rs 95,692.31 crore.

Detailed Insights:

• The G RAM G Act proposes a higher share of states in funding the guaranteed rural employment program compared to MGNREGA.
• Under MGNREGA, the Centre bore 100% of wage costs and 75% of material and administrative costs, effectively funding 90% of the scheme's overall fiscal burden.
• The new funding arrangement may lead to an additional fiscal burden of over Rs 30,000 crore annually on the states, impacting their budget allocations.
• The G RAM G Act introduces a "normative" formula for fund allocation, transforming it into a top-down process based on parameters prescribed by the Central Government.
• The 60-day pause during sowing and harvesting aims to ensure adequate agricultural labor availability, potentially shortening the window to avail the scheme's 125 days of work.

Key Concepts Involved:

• MGNREGA: A previous flagship rural employment scheme guaranteeing 100 days of wage employment to rural households.
• Normative Allocation: Fund allocation by the Central Government to the State based on objective parameters.
• Fiscal Burden: The financial responsibility or cost borne by a government or entity.