Repeal of Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA), 2005

President of India gave assent to the Viksit Bharat-Guarantee for Rozgar and Ajeevika Mission (Gramin) (VB-G RAM G) Bill, 2025 on December 21, 2025. The 31-page long VB-G RAM G) Act, 2025 "represents a comprehensive statutory overhaul of Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA), 2005". It has 37 Section and two Schedules. The VB-G-RAM G Act repeals MGNREGA. It repeals not only MGNREGA but also "all rules, notifications, Schemes, orders and guidelines made thereunder". 

The MGNREG Act was passed unanimously by the parliament. Its repeal has repealed the unanimity, said Dr. Gopal Krishna, Advocate, Patna High Court at a Round Table in Patna. 

It is claimed that this law is aimed at establishing a rural development framework by providing a statutory guarantee of one hundred and twenty-five days of wage employment in every financial year to every rural household whose adult members volunteer to undertake unskilled manual work; to enable them to participate more effectively in the expanded livelihood security framework.

It claims to focus on empowerment, growth, convergence and saturation through public works aggregating into forming Viksit BharatNational Rural Infrastructure Stack. As per Section 2 (v) means the consolidated aggregation comprising proposed works emerging from the Viksit Gram Panchayat Plans aggregated at the District and State levels, and aligned with the four thematic domains of works specified in Schedule I of the VB-G-RAM G Act which provides Minimum features of VB—G RAM G Scheme. It is required to be read with Section 8 (3) of the Act.

Section 24 of the Act reads: "Without prejudice to the foregoing provisions, transparency and ccountability in the implementation of the provisions of this Act, shall be ensured through (a) biometric authentication of workers, functionaries, and transactions, in such manner as may be specified by the Central Government; (b) geospatial technology enabled planning, including geo-referencing, satellite imagery, digital mapping of works, and other approved spatial technologies, as may be specified by the Central Government; (c) mobile application based and dashboard-based monitoring systems providing real-time visibility of demand, works, workforce deployment, payments, progress and other indicators, as may be specified by the Central Government; (d) weekly public disclosure systems, including digital and physical disclosure of key metrics, muster rolls, payments, sanctions, inspections and  grievances, as may be specified by the Central Government; (e) strengthening of the social audit mechanism, and the adoption of such other technology-enabled systems as may be prescribed by the Central  Government." 

The new makes two direct references two Aadhaar Number and at least half a dozen indirect reference to it.  

Quite like its predecessor, the thematic focus of the new law is on water security through water-related works, core rural infrastructure, livelihood-related infrastructure and special works to mitigate extreme weather events. It is claimed that the new law will institutionalise convergence, saturation-driven planning and whole of government delivery through Viksit Gram Panchayat Plans, integrated with the PM Gati Shakti to address the varying needs of Gram Panchayats, and powered by geospatial systems, digital public infrastructure, District and State planning mechanisms, with such plans aggregated at the Block, District, State and National levels. It will modernise governance, accountability and citizen engagement through a comprehensive digital ecosystem, including biometric authentication at various levels, global positioning system or mobile based worksite monitoring, real-time management information system dashboards, proactive public disclosures, and use of Artificial Intelligence for planning, audits and fraud-risk mitigation.

Section 3 (1) and (2) of the Act reads: "The State Government, shall within six months from the date of commencement of this Act, by notification, make a Scheme consistent with the provisions of this Act and the features provided therein. (2) The Scheme made under sub-section (1) shall be implemented as a Centrally Sponsored Scheme, under which the financial liability shall be shared between the Central Government and the State Government in accordance with the  fund-sharing pattern provided under sub-section (2) of section 22 of this Act, including enhanced share of the Central Government in respect of the North-Eastern  States and Himalayan States, and the responsibility of the State Government to bear  any expenditure incurred in excess of its allocated share." 

Section 22 (1) and (2) reads:. (1) The Scheme implemented under this Act, shall be a Centrally Sponsored Scheme. (2) For the purposes of this Act, the fund-sharing pattern between the Central Government and the State Governments shall be 90:10 for the North Eastern States, Himalayan States and Union territory (Uttarakhand, Himachal Pradesh and Jammu and Kashmir) and 60:40 for all other States and Union territories with legislature." 

Section 22 (4) (5) (6) and (7) reads: "(4) The Central Government shall determine the State-wise normative allocation for each financial year, based on objective parameters as may be prescribed by the Central Government. (5) Any expenditure incurred by a State in excess of its normative allocation, shall be borne by the State Government in such manner and procedure as may be prescribed by the Central Government. (6) In accordance with the State-wise normative allocation determined under this Act, the share of the Central Government shall include expenditure towards, (a) payment of wages for unskilled, semi-skilled and skilled labour employed under the Scheme; (b) the material component of works, subject to the provisions in Schedule I; (c) such administrative expenses as may be specified by the Central Government, including salary and allowances of Programme Officers and supporting staff, administrative expenses of the Central Council, facilities required under Schedule II, and such other items as may be prescribed by the Central Government. (7) In accordance with the State-wise normative allocation determined under this Act, the share of the State Government shall include expenditure towards, (a) payment of wages for unskilled, semi-skilled and skilled labour employed under the Scheme; (b) the material component of works, subject to the provisions in Schedule I;(c) such administrative expenses as may be specified by the Central Government, including salary and allowances of Programme Officers and supporting staff, administrative expenses of the State Council, facilities required under Schedule II, and such other items as may be prescribed by the  Central Government. (8) The State Government, shall bear the expenditure towards unemployment allowance and delay compensation as may be prescribed by the State Government."

The new law makes the VB-G-RAM G scheme contingent upon executive notification, which allows the Union Government to decide when and where it will operate. It aims "to facilitate adequate farm-labour availability during peak agricultural seasons, and, in view of the wage employment guarantee for the rural workforce." G RAM G scheme mandates suspension of work for up to 60 days every year in the name of agricultural seasons. 

Section 4 (1) and (2) reads:"(1) All works undertaken under this Act shall be originated from the Viksit Gram Panchayat Plans prepared under sub-section (3), and consolidated at the Block, District and State levels and further aggregated into the Viksit Bharat National Rural Infrastructure Stack, which shall comprise a comprehensive listing of works aligned with National development priorities. (2) The Viksit Bharat National Rural Infrastructure Stack shall encompass four thematic focus domains, namely: (a) water security through water-related works; (b) core rural infrastructure; (c) livelihood-related infrastructure; and (d) works for the mitigation of extreme weather events."

Section 4(5) of the VB-G-RAM G Act reads, “The Central Government shall determine the State-wise normative allocation for each financial year, based on objective parameters as may be prescribed by the Central Government.” The VB-G-RAM G scheme will cost Rs 55,590 crore (Rs 1,51,282-95,692) to the states if it is implemented across the country, according to its own Financial Memo (p.39). Indebted States like Bihar, which is the fifth most indebted State cannot afford it. 

Section 10 of the Act reads:."The Central Government may, by notification, specify the wage rate for the purposes of this Act, which shall apply to all unskilled manual work provided under the Scheme: Provided that different wage rates may be notified by the Central Government for different areas:Provided further that the wage rate so notified shall not be less than the prevailing wage rate as notified under section 6 of the Mahatma Gandhi National Rural Employment Guarantee Act, 2005: Provided also that until a wage rate is notified by the Central Government under this section, the wage rates notified under section 6 of the Mahatma Gandhi National Rural Employment Guarantee Act, 2005, shall continue to apply in the areas covered by this Act."