Sounding the final bugle on the Mahatma Gandhi National Rural Employment Guarantee Act passed in 2005, the Union government on Monday (May 11, 2026) notified that from July 1, all “rules, notifications, schemes, orders and guidelines” made under the law will stand repealed, and the Viksit Bharat – Guarantee for Rozgar and Ajeevika Mission (VB-G RAM G) will come into force.

Union Rural Development Minister Shivraj Singh Chouhan expressed confidence that the move marks the dawn of a “new era in the lives of labourers”. He said the scheme would prove to be a milestone in fulfilling the resolve to build “developed villages” as a foundation for a “developed India”.

Consulting with States: Minister

He also noted that the process of framing the rules for the new Act is underway following consultations with States. “No labourer is deprived of employment during this transition phase. Comprehensive arrangements have already been put in place to guarantee this,” the Minister said. Most States will have a maximum of six months to complete the necessary preparations, he added.

MGNREGA was enacted under the Congress-led UPA and was part of a set of welfare legislations that emerged from the National Advisory Committee. The new rural employment scheme upends several MGNREGA frameworks, including its demand-based approach stretching the budget to match the demand on the ground.

Though the government issued a note answering frequently asked questions, it did not clarify crucial aspects, including the objective parameters and formula for deciding the normative budget, which will determine how much each State receives. Under MGNREGA, the Centre paid 100% of the wage bill; under the new scheme, the expenditure will be split between the Centre and the States in a 60:40 ratio for most States.

The VB-G RAM G legislation was passed by Parliament in December last year, without pre-legislative consultations. After its passage, the government has held weekly meetings with State rural development departments to build the infrastructure required for implementation.

The new scheme enhances the statutory employment guarantee from 100 to 125 days in every financial year.

On job cards

The government clarified that existing job cards that are e-KYC verified will remain valid until Gramin Rozgar Guarantee cards are issued. As per a recent study by LibTech, a consortium of activists and academics, as of May 7, 2026, 11.58 crore registered workers (45.4%) and 0.95 crore active workers (9.5%) are yet to complete e-KYC. “Workers shall not be denied employment merely due to pending e-KYC, and facilitation mechanisms have been provided for completion of e-KYC, including at worksites, wherever necessary,” the government note said.

It also clarified that workers may continue to demand employment orally, in writing through the existing Form-6 framework, or through digital platforms. Provisions carried over from MGNREGA, such as unemployment compensation in case of failure to provide work, will continue. Attendance will continue to be captured through the National Mobile Monitoring System, despite concerns over reliance on digital systems in areas with patchy internet coverage. Ongoing works under MGNREGA as on the date of commencement may continue under the new Act. Where ongoing works are insufficient to meet demand, new works consistent with Schedule I of the new Act may be taken up.

The legislation provides for a blackout period of up to 60 days, to be notified by States, ostensibly to ensure the availability of agricultural labour during peak sowing and harvesting seasons. This clause has drawn criticism for reducing workers’ bargaining power.

Nothing new: Congress

Reacting to the announcement, Congress General Secretary (Communications) and former Rural Development Minister Jairam Ramesh said the government’s statement “adds nothing new to what is already known.” “No details have been revealed except to say that they will be released soon. If this replacement for MGNREGA is to be implemented from July 1, 2026, then all operational details should have been available by now. Public consultations and discussions with State governments on these details have to be done in a meaningful manner and not just to complete a formality,” he said.

Mr. Ramesh said that the only guarantee that VB-G RAM G offers is that of extreme centralisation and weakening of the bargaining power of rural labour. “The constitutional right to work and the right to wages of rural Indian families is being stolen,” he said.

The budget for rural employment schemes saw a 43% hike, with allocation of ₹95,692.31 crore to the new rural employment scheme under the Viksit Bharat-Guarantee for Rozgar and Ajeevika Mission (Gramin) (VB–G RAM G) Act, 2025 and ₹30,000 crore for the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS).

Together, the allocation for both rural employment schemes stands at ₹1,25,692.31 crore, compared with the Revised Estimate of ₹88,000 crore for the MGNREGA in 2025-26. However according to activists, the allocation is not expected to meet the government’s own target of providing 125 workdays to all workers enrolled under the MGNREGS. Calculations show that to meet this commitment, the government would need to allocate ₹2.30 lakh crore.