Government tables Bill to replace MGNREGA amid protests

Why in News:

The government on Tuesday (December 16, 2025) introduced the Viksit Bharat Guarantee for Rozgar and Ajeevika Mission (Gramin) (VB-G RAM G) Bill, 2025, which seeks to replace the two-decade-old Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA).

UPSC Relevance: GS II & GS III

• rights-based welfare, Welfare state vs minimum government debate
• Employment generation and rural distress
• Fiscal federalism and decentralisation

Background and Context

• The Union government has introduced the Viksit Bharat Guarantee for Rozgar and Ajeevika Mission (Gramin) (VB-G RAM G) Bill, 2025.
• The Bill proposes to replace the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA), 2005, which has been in force for about 20 years.
• MGNREGA is one of India’s most significant rights-based welfare legislations, guaranteeing 100 days of wage employment to rural households.

Key Features of MGNREGA:

• Legal right to work: Employment must be provided on demand.
• Anchored in Directive Principles of State Policy, especially Articles 39, 41 and 43.
• Demand-driven: Work is generated when people demand it, not capped by budgets.
• Unemployment allowance if work is not provided.
• Centre–State funding pattern: Around 90% Centre share for wages.
• Decentralised implementation through Gram Panchayats.

Government’s Rationale for the New Bill:

Statements by the Government

• Union Rural Development Minister Shivraj Singh Chouhan argued that:
  • The government has done more for rural development than previous regimes.The new law aligns with Gandhian philosophy and seeks to build “Ram Rajya” in villages.
  • Emphasis is on:
    • Holistic village developmentBalance between agriculture and labour
    • Livelihoods (Ajeevika) rather than only wage employment
• The government maintains that the Bill reflects the ideals of Mahatma Gandhi, even though his name has been removed from the Act.

Major Changes Proposed under VB-G RAM G (as alleged by Opposition)

Shift from demand-driven to budget-driven model:

• Erosion of the “Right to Work” (Demand-Driven vs. Supply-Driven):

• MGNREGA is a rights-based law where the legal right to work is triggered by the worker’s demand, and failure to provide work results in a mandatory unemployment allowance.

• Critics argue the shift to Normative Allocation and central control makes the scheme supply-driven and budget-capped. If the state exhausts its “normative allocation,” the legal guarantee is effectively dissolved, weakening the statutory right.

• Reduction in Centre’s funding share from 90% to 60%
  • Centre:State split is 60:40 for most states. (90:10 for North-East/Himalayan states).
• Greater centralisation of decision-making
• Replacement of a statutory right with a government “guarantee”
• Promise of 125 days of work, but without clarity on enforceability

Opposition’s Criticisms:

Weakening of Employment Rights

• Opposition leaders termed MGNREGA a “revolutionary and unanimously passed Act”.
• Allegation that:
  • The new Bill dilutes the right-based framework
  • Removes legal accountability of the State
  • Converts welfare from rights to charity

Federalism Concerns

• Reduction in Centre’s funding share will:
  • Increase financial burden on States
  • Hurt States already affected by GST compensation delays
• Seen as a violation of fiscal federalism

Centralisation vs Decentralisation

• Decision-making powers allegedly shifted away from:
  • Gram Panchayats
  • State governments
• Opposed as being against the spirit of 73rd Constitutional Amendment

Symbolism and Legacy

• Removal of Gandhi’s name viewed as:
  • An attack on moral and historical legitimacy
  • Undermining Gandhian philosophy of dignity of labour
• Opposition leaders accused the government of “ridiculing” the Father of the Nation.

Constitutional and Governance Issues Involved:

Rights-based Welfare vs Executive Discretion

• MGNREGA created a justiciable entitlement
• VB-G RAM G is seen as shifting towards policy-based welfare, weakening accountability

Directive Principles of State Policy

• Article 41: Right to work
• Article 39: Livelihood and economic justice
• Dilution of MGNREGA may weaken DPSP implementation

Cooperative Federalism

• Funding pattern change raises concerns about:
  • Fiscal autonomy of States
  • Vertical imbalance in Centre–State relations

Democratic Process

• Introduction of a major welfare reform without:
  • Wider consultation
  • Committee scrutiny
• Raises questions on legislative due process

Conclusion

The VB-G RAM G Bill, 2025 marks a major shift in India’s rural employment policy. While the government projects it as a reform aligned with Gandhian ideals and village development, the Opposition views it as a rollback of constitutional, legal and federal safeguards embedded in MGNREGA. The debate reflects a broader ideological contest between rights-based welfare and centrally controlled guarantees.