India
oi-Gaurav Sharma
India’s rural employment system is set for a major transformation as the Central government has announced the rollout of the Viksit Bharat Guarantee for Rozgar and Ajeevika Mission (Gramin) Act, 2025 from July 1, 2026. The new law, called the VB-G RAM G Act, will replace the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA), which has been operational for over two decades.
The Ministry of Rural Development confirmed that MGNREGA will be repealed once the new framework comes into force nationwide. The government, however, stated that ongoing projects and workers currently employed under the scheme will continue without disruption during the transition period.
India’s Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) will be replaced by the Viksit Bharat Guarantee for Rozgar and Ajeevika Mission (Gramin) Act (VB-G RAM G Act) on July 1, 2026, shifting focus to long-term rural livelihoods and development.
As per the official notification, all MGNREGA works active till June 30, 2026, will automatically shift to the new system. Existing job cards connected through e-KYC verification will remain valid until new “Gramin Rozgar Guarantee Cards” are issued to beneficiaries.
The Centre also clarified that workers will continue to receive employment even if their e-KYC verification is pending. Fresh registrations for rural workers without job cards will be handled through gram panchayats.
The government says the new rural employment law is aimed at moving beyond temporary wage support and creating a stronger rural economy focused on long-term livelihood opportunities, infrastructure development and village self-reliance. Under the VB-G RAM G framework, gram panchayats are expected to play a bigger role in planning and executing development projects at the local level.
Officials are currently drafting fresh guidelines related to wage payments, fund allocation and grievance redressal mechanisms in consultation with state governments and Union Territories. The draft rules are likely to be released soon for public suggestions and feedback.
Experts believe the new employment guarantee system could significantly impact industries dependent on migrant and rural labour. Sectors such as construction, manufacturing and private labour-intensive businesses may face worker shortages as more employment opportunities become available within villages.
At the same time, economists expect higher rural incomes to boost consumption across India’s village economy. Sectors including FMCG, agriculture equipment, fertilizers and rural retail businesses are likely to benefit from increased spending power in rural areas.
Industry observers also warn that businesses may have to deal with rising labour costs and tighter compliance requirements once the new framework is implemented across the country.
The VB-G RAM G Act is being viewed as one of the biggest rural policy reforms in recent years, with the Centre positioning it as a key part of its larger “Viksit Bharat” vision focused on employment generation, rural infrastructure and sustainable economic growth in villages.
