"The transition from MGNREGA to the Viksit Bharat-Guarantee for Rozgar and Ajeevika Mission (VB-G RAM G) represents a fundamental paradigm shift in India's rural social security architecture. It moves from a demand-driven, open-ended welfare model to a normative, supply-constrained framework aligned with the 16th Finance Commission's horizontal devolution logic. By prioritizing 'GSDP distance' (42.5% weightage), the scheme seeks to institutionalize fiscal equity, channeling resources toward lagging states. Furthermore, the introduction of a 60:40 cost-sharing mechanism and performance-linked incentives aims to enhance state-level accountability and asset quality, addressing chronic issues of corruption and delayed project completion. However, this structural shift introduces significant socio-economic risks. The move from a legal guarantee of work to a fixed normative allocation potentially dilutes the 'Right to Work,' making the safety net vulnerable during sudden economic shocks or droughts. Additionally, while the scheme promotes fiscal prudence for the Centre, the requirement for states to co-fund wages may exacerbate the fiscal distress of the very states—such as Bihar or Uttar Pradesh—that the scheme intends to support, potentially creating a paradox of implementation."
The Union Government has notified the draft rules for the Viksit Bharat-Guarantee for Rozgar and Ajeevika Mission VB-G RAM G, which will replace the Mahatma Gandhi National Rural Employment Guarantee Act MGNREGA starting July 1.
The fundamental shift lies in moving away from a purely demand-driven model to a normative, criteria-based fiscal allocation model linked with the 16th Finance Commission horizontal devolution formula.
Instead of allocating funds purely based on demand, the Centre will use the indicators designated for inter-state tax devolution. This benefits larger and poorer states.
From the second year of the Act implementation, a portion of the funding will become performance-linked. States will be incentivized based on: