Industry Odisha Bureau, Sep 01: India’s rural employment framework has shifted from MGNREGA to the Viksit Bharat Guarantee for Rozgar & Ajeevika Mission, Gramin. The new VB-G RAM G Act took effect on July 1, 2026, replacing the two-decade-old employment guarantee law. Government data shows a sharp fall in participation since the transition began this summer.
Households employed under the scheme dropped to 1.39 crore in July-August, against a five-year average of 3.44 crore. Person-days of work generated fell to 14.54 crore, a decline of roughly 68 percent from the preceding average. Average daily wages rose modestly to ₹282.5, continuing a gradual upward trend seen since 2021.
MGNREGA guaranteed up to 100 days of work annually per rural household, anchored in the principle of a statutory right to work. Since 2009, its wages have been delinked from the Minimum Wages Act, a change critics say eroded real earnings over time. The VB-GRAM G Act does not explicitly tie wages to minimum-wage benchmarks, a point now under judicial scrutiny.
On August 21, a three-judge Supreme Court Bench examined a petition on minimum wages within rural employment guarantee programmes. The Bench praised MGNREGA’s developmental role while questioning whether the right to work merits Article 21 status. It sought a fresh petition rather than ruling immediately on the underlying wage question.
Legal scholars have invoked the 1983 Sanjit Roy verdict, which held that sub-minimum wages amount to forced labour. Others cite the doctrine of non-retrogression, affirmed in the Navtej Singh Johar case, which restricts rolling back established statutory rights. The government has not publicly responded to these specific constitutional arguments.
Economists note that rural wages influence household purchasing power and local consumption patterns. Higher and more reliable earnings can support demand for goods, services and agricultural markets. Officials have not detailed how VB-GRAM G’s funding structure will address the fiscal burden now shifted toward states already constrained by borrowing limits under the FRBM framework.
The transition also allows certain areas to be de notified and excluded from coverage, narrowing MGNREGA’s earlier universal reach. Whether implementation gaps reflect early teething problems or structural design remains contested among economists and policymakers. The Supreme Court’s eventual ruling, and how states adapt administratively, will likely shape the programme’s trajectory. For now, the data points to a significant near-term contraction in guaranteed rural employment.
