The VB–G RAM G Act, 2025 represents a structural departure from MGNREGA's demand-driven model. Critically analyse the key changes and their implications for rural livelihoods and Centre-State fiscal relations.

Q. The VB–G RAM G Act, 2025 represents a structural departure from MGNREGA's demand-driven model. Critically analyse the key changes and their implications for rural livelihoods and Centre-State fiscal relations. (15 marks, 250 words)

Effective 1 July 2026, the VB–G RAM G Act repeals MGNREGA, 2005, shifting rural employment from an open, demand-driven safety net to a planned, asset-oriented and cost-shared model [1]. Whether this strengthens or dilutes rural security demands balanced scrutiny.

Key structural changes - Guarantee raised from 100 to 125 days; open shelf-of-works replaced by directed Viksit Gram Panchayat Plans across four themes (water security, infrastructure, extreme-weather mitigation) [3]. - Universal ₹300 wage floor with over 10% average hike [2]. - Administrative ceiling raised 6%→9%; biometric attendance and weekly public disclosures for transparency [1]. - New 60-day agricultural pause provision [3].

Implications for rural livelihoods - Positive: 25 extra days plus the ₹300 floor and steepest hikes (15–25%) for historically low-wage states like UP and Bihar raise purchasing power [2]; asset creation builds productive rural capital [1]. - Negative: the 60-day pause may shrink lean-season work for landless labour; diluting the automatic demand-trigger weakens the enforceable right-to-work character [3].

Implications for Centre-State fiscal relations - Positive: 60:40 sharing raises states' stake and efficiency incentive; NE/Himalayan 90:10 retained, protecting weaker states [3]. - Negative: the sharp fall from near-full central funding of wages strains state budgets, while unemployment-allowance liability stays with states — a federal friction point [3].

Net, the Act tilts toward productivity and cooperative financing. Its success hinges on preserving entitlement guarantees and cushioning state finances, advancing Article 243G devolution and the Viksit Bharat 2047 vision only if equity safeguards hold.

(~250 words)

Sources: 1. VB–G RAM G Act, 2025 — Commencement & Features, PIB Press Note — 1 July 2026 commencement, MGNREGA repeal, admin ceiling, asset-oriented works 2. Government Notifies Revised Wage Rates under VB–G RAM G Act, 2025, PIB (PRID 2279660) — ₹300 floor, >10% average hike, targeted 15–25% increases for low-wage states 3. VB–G RAM G Bill, 2025 — Bill Summary, PRS Legislative Research — 125-day guarantee, 60:40 and 90:10 funding, 60-day pause, state-borne unemployment allowance