Riyasat IAS Mentorship Team
Updated 19 Jul 2026
3 min read
VB-GRAM G Act, 2025 Replaces MGNREGA
GS PAPER II & III — Governance, Economy, Schemes
Why in News? Beginning 1 July 2026, the Centre withdrew the two-decade-old Mahatma Gandhi National Rural Employment Guarantee Act and put in its place the Developed India-Employment and Livelihood Mission (Rural) Act, 2025, known by its short form VB-GRAM G. The new law converts a demand-based employment guarantee into a supply-based allocation model, a shift that has triggered fresh debate on Centre-state financial relations.
Key Facts for Prelims VB-GRAM G Act, 2025 replaces MGNREGA, effective 1 July 2026.Employment is now capped by a pre-fixed ‘Standard Allocation’ budget, not by worker demand.Combined labour + material cost is shared Centre:State in a 60:40 ratio (old MGNREGA was effectively ~90:10).National rural minimum wage revised to ₹300/day.Highest wage hikes: Uttar Pradesh (+₹48), Bihar (+₹45), Madhya Pradesh (+₹39).Highest absolute wages: Haryana (₹409), Goa (₹406), Kerala (₹401).Lowest hike: Telangana, just 0.33% (₹307 → ₹308).Dr Anoop Satpathy Committee (2019) had recommended ₹375/day — well above the new ₹300 floor.States must now bear unemployment allowance and delay-compensation costs entirely on their own.
Quick-Reference Data Table
State/Category
Wage Change
Detail
Uttar Pradesh
Highest rise
+₹48 per day
Bihar
High rise
+₹45 per day
Madhya Pradesh
High rise
+₹39 per day
Rajasthan
Moderate rise
+₹19 per day
Haryana
Highest absolute wage
₹409 per day
Goa
High absolute wage
₹406 per day
Kerala
High absolute wage
₹401 per day
Telangana
Lowest rise
+0.33% (₹307 → ₹308)
UPSC Note — Prelims Angle Expect statement-based MCQs from VB-GRAM G Act, 2025 Replaces MGNREGA testing numbers, scheme names, ratios and committee recommendations. Revise the data table above rather than the narrative — Prelims rewards precision on figures.
Prelims MCQ Practice With reference to the VB-GRAM G Act, 2025, consider the following statements: 1. It fully replaces the Mahatma Gandhi National Rural Employment Guarantee Act, 2005. 2. It continues MGNREGA’s demand-driven model, guaranteeing work whenever a worker demands it. 3. Under the new law, combined labour and material expenditure is shared between the Centre and states in a 60:40 ratio. Which of the statements given above is/are correct? (a) 1 and 2 only (b) 2 and 3 only (c) 1 and 3 only (d) 1, 2 and 3 Answer: (c) Statement 2 is incorrect because VB-GRAM G replaces the demand-driven guarantee with a supply-based Standard Allocation model; statements 1 and 3 correctly describe the replacement of MGNREGA and the new 60:40 cost-sharing formula.
