At least three States, two of them with BJP-led governments, have raised concerns over the increased financial burden on them under the new rural employment programme, the Viksit Bharat-Guarantee for Rozgar and Aajeevika Mission (Gramin) (VB-G RAM G), which comes into effect on July 1.

Under VB-G RAM G, a majority of the States are required to bear 40% of the total expenditure, in contrast to its predecessor legislation, the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA). Under MNREGA, the Centre bore 100% of the wage bill and the States had to pay only a part of the material bill, which accounted for only 10% of the total budget.

The Union Rural Development Ministry shared this information on a Right to Information (RTI) application filed by Chakradhar Buddha of the National Campaign for People’s Right to Information (NCPRI). Mr. Buddha had asked for records relating to meetings and consultations organised by the Union Government with the States regarding VB-G RAM G and the transition from the MGNREGA to the new scheme.

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In its reply, the government shared responses of only 13 States. Of them, five had sought a revision of wage rates and four had flagged reservations over the provision of 60 non-working days during the peak agricultural season. Almost all States had pointed to delays in wage and related payments, seeking early clearance of dues.

Bihar, Madhya Pradesh, and Jharkhand were the three States that explicitly asked for a reconsideration of the proposed change in the funding pattern. As per the interim allocation made under VB-G RAM G, Bihar will have to pay ₹4,477 crore. This amount, as per an analysis done by NREGA Sangharsh Morcha, is inadequate to keep the government’s promise of providing 125 days of work. As per their analysis, Bihar will have to pay ₹15,939 crore for realising this goal. Similarly, in the case of Madhya Pradesh, the burden on the State is ₹4,168 crore, which would suffice only to provide 43 days of work. For 125 days, the financial liability on the State will be ₹20,037 crore. Jharkhand, to meet the 40% share, will have to shell out ₹1,804 crore as per the current allocation, which only suffices for 41 days. It will have to pay ₹9,293 crore to meet the 125-day commitment. Unlike Bihar and MP, the two BJP-ruled States, Jharkhand explicitly said during the post-legislative consultation that bearing the 40% share will be difficult for the State.

Even States such as Sikkim and Uttarakhand, which fall under the 90:10 Centre-State sharing pattern [applicable to the north-eastern and Himalayan States], had sought a review of the clause. Uttarakhand, citing its terrain-related challenges, argued that the Centre should continue bearing 100% of the wage bill.

Five States seek wage hike

Of the 13 States, five States demanded a hike in the wages of rural workers. MGNREGA wages were far below the market rate. Bihar sought a hike in the wages from the present ₹255 to ₹413, while Jammu & Kashmir sought ann increase in the wages from ₹272 to ₹311. Both Jharkhand and Punjab argued that the wages should be competitive and in line with market conditions. Uttarakhand underlined the tough landscape where people have to work and sought a compensatory hike.

Blackout period

At least four of the 13 States objected to the scheme’s 60-day blackout period, proposed during the peak agricultural season. The government had hailed this break as an important step to make labour easily available, while activists had criticised it, saying it will reduce the workers’ bargaining power. Among the States critical of this clause was Punjab, which is heavily dependent on agriculture. Karnataka and Telangana, ruled by Congress governments, also sought a reconsideration of this blackout period.

Nearly all the States have highlighted delays in clearing the wage and material bill by the Centre and demanded that it be avoided under VB-G RAM G.