The Narendra Modi government’s decision to replace the United Progressive Alliance-era Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) with the Viksit Bharat—Guarantee for Rozgar and Ajeevika Mission or VB-G RAM G, from July 1 marks one of the most significant changes in India’s rural welfare architecture in the last two decades.

The Centre has described the new legislation as an expansion of the existing rural employment guarantee programme, with larger budgets, more workdays and technology-driven transparency. But workers’ organisations and labour activists have termed such claims misleading, arguing that it fundamentally alters the character of MGNREGA—recasting a legal right to work as a development programme driven by targets, digital compliance and fiscal constraints.

Critics, economists, and opposition parties have widely condemned Prime Minister Narendra Modi’s remarks about MGNREGA as dismissive on several previous occasions. During the COVID-19 pandemic, however, the Modi government used MGNREGA to address rural distress and manage the fallout of nationwide lockdowns.

The same government is now showcasing VB-G RAM G as the next stage of rural transformation under the Viksit Bharat @2047 vision. Official statements highlight an increase in guaranteed employment from 100 to 125 days, climate-resilient infrastructure, technology-enabled transparency, village-level planning, and convergence with other development schemes.

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MGNREGA was conceived as a rights-based employment guarantee scheme to address rural distress. Its central premise was straightforward: if a rural household demanded work, the State was legally obligated to provide it or pay unemployment allowance. VB-G RAM G is increasingly framed as a means to wider developmental objectives rather than as a right in itself.

The government’s case

In a press note issued on May 11, the Ministry of Rural Development described the legislation as a “historic transition” to a modern rural development framework combining livelihood security with durable asset creation, climate resilience and technology-enabled governance. The Ministry highlighted the increase in guaranteed employment from 100 to 125 days, continuation of unemployment allowance provisions, compensation for delayed wage payments and expanded worksite facilities as evidence that the legal guarantee of employment is being strengthened rather than diluted.

Critics, however, argue that many of these assurances remain untested and that several provisions of the draft rules could undermine the very guarantees the government says it is strengthening.

The new law comes into force on July 1, although the government invited public feedback on the draft rules until June 20. The proposed framework has already triggered a confrontation between the government and organisations representing rural workers. On June 17, the NREGA Sangharsh Morcha and the Joint Platform for Agricultural and Rural Workers held a press conference in New Delhi, arguing that the new legislation weakens the foundational principles of the employment guarantee programme.

The funding gap

According to critics, the Centre has projected the increase in guaranteed employment from 100 to 125 days as the flagship feature of the legislation. Analyses prepared by labour organisations argue that interim allocations fall significantly short of what would be required to provide the promised level of employment. Based on proposed allocations and active job cards, most major States would be able to finance only a fraction of the promised 125 days. In some cases, available funds may support fewer than 50 days of employment per active job card. The gap is particularly stark in States such as Maharashtra, Uttar Pradesh, Madhya Pradesh and Rajasthan, where the additional resources required to meet the guarantee would run into tens of thousands of crores of rupees.

Nikhil Dey, a social activist with the NREGA Sangharsh Morcha, argued that the draft rules reveal a striking lack of clarity on key aspects such as wage rates and worker entitlements. According to Dey, the rules centralise authority within the Union government, encourage discretionary decision-making and institutionalise the underfunding of what is being presented as an enhanced 125-day employment guarantee. “Urgent attention is needed regarding the new statutory rules, which were formulated by a Prime Minister’s Office screening committee without public consultation, and their subsequent impact on the right to work,” he said.

The funding controversy is closely tied to another significant departure from the MGNREGA framework. Under the proposed structure, States are expected to contribute 40 per cent of programme expenditure. Critics argue that this effectively transforms a demand-driven national entitlement into a scheme constrained by budgetary ceilings and State finances. The concern is not merely about money; it is about whether employment will continue to be guaranteed when demand rises, or whether it will increasingly depend on allocations determined in advance.

Another provision that has drawn scrutiny is the power granted to States to suspend works for an aggregate period of up to 60 days during peak sowing and harvesting seasons. The government argues that this measure is intended to ensure adequate agricultural labour availability while preserving the full 125-day employment guarantee during the remainder of the year. Critics, however, contend that the provision raises questions about whether employment under the new framework will remain genuinely demand-driven or increasingly subject to administrative scheduling and broader economic priorities.

The evidence cited by worker organisations suggests that these anxieties are not merely theoretical. Data compiled from official records indicates a decline in person-days generated during the first five months of 2026 compared with the corresponding period last year. Several large States—including Uttar Pradesh, Rajasthan, Karnataka, Madhya Pradesh, Maharashtra, Andhra Pradesh, and Jharkhand—have recorded significant declines in employment generation.

Gulzar Singh Goriya of the Joint Platform of All India Agricultural Workers’ Union said employment generation had already begun to decline during the transition period: “The centralised design of the new legislation weakens the federal structure and adversely affects those most dependent on public employment programmes.”

The technology problem

A second major point of contention concerns technology. The government presents digital monitoring, biometric verification and facial-authentication attendance systems as instruments of transparency and accountability. In principle, these systems are intended to reduce leakages and ensure that benefits reach genuine workers. In practice, workers’ organisations argue that the burden of technological failures has fallen overwhelmingly on labourers rather than administrators.

“We fought for years to secure rights under NREGA. Now the government has weakened the very law,” said Kamla Devi, an MGNREGA worker from Rajasthan. “The technology used for attendance has complicated things. Local officials seem unbothered by our hardships. Neither the companies that developed these attendance applications nor the officials who introduced them are being held accountable when workers suffer.”

Studies and field reports from Rajasthan document repeated instances of attendance being denied because of application failures, server outages, connectivity problems and facial-recognition mismatches. Workers reportedly spent hours attempting to register attendance, only to be turned away without wages. In some cases, attendance was rejected because workers’ appearance had changed; in others, software updates rendered attendance systems unusable.

Madhulikha Yalama, Joint Secretary of the Rajasthan Asangathit Mazdoor Union, said a study conducted by the organisation found numerous problems with electronic Know Your Customer (e-KYC) requirements. Workers reported difficulties being recognised by facial-recognition systems following minor changes in appearance, while software updates occasionally resulted in worksites disappearing from digital records. “Technological interventions introduced in the name of transparency have created new barriers for workers,” she said.

According to Yalama, workers had raised concerns over the National Mobile Monitoring System (NMMS) repeatedly during the past three years, citing application failures, connectivity issues, biometric authentication errors and wage denials despite attendance at worksites. “Instead of addressing these concerns, the draft VB-G RAM G rules institutionalise many of the same technologies,” she argued.

The concern assumes greater importance because the new programme formalises many of the digital mechanisms that have generated controversy in recent years. The requirement of e-KYC verification and continued reliance on digital attendance systems have reinforced fears that access to employment could increasingly depend on technological compliance rather than the guarantee of work itself.

The Central government has sought to address concerns regarding technology-driven exclusions. According to the Ministry, workers will not be denied employment merely for e-KYC formalities, technical failures or connectivity-related disruptions. The Ministry maintains that biometric authentication, geo-tagging, digital monitoring, and real-time oversight mechanisms are intended to improve transparency, reduce leakages, and ensure timely wage payments. It pointed to a Central allocation of Rs.95,692 crore for 2026-27 as evidence of the programme’s financial commitment.

Another concern is that the draft framework leaves several issues unresolved. Workers’ organisations have pointed to the absence of clear commitments on statutory minimum wages and expressed concern that the legislation prioritises administrative reform without adequately addressing long-standing demands relating to common minimum wages and employment availability.

A battle over the welfare State

The debate over VB-G RAM G is therefore about much more than a change in nomenclature. It represents a larger struggle over the future direction of India’s welfare State. MGNREGA emerged from a political consensus that employment during periods of distress was a legal entitlement. VB-G RAM G reflects a different philosophy—one that seeks to integrate employment with productivity, infrastructure creation, digital governance, and the broader Viksit Bharat vision.

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Opposition to the legislation is now beginning to take organisational form. B. Venkat, General Secretary of the All India Agricultural Workers’ Union, announced that a series of protests would be organised across the country from July 1 onwards until the workers’ concerns are addressed. “A majority of workers engaged in MGNREGA are women, Dalits, OBCs, and Adivasis. The attack on MGNREGA should be seen as an attack on social justice,” he said.

The success or failure of VB-G RAM G will ultimately be judged by whether it can reconcile its competing objectives on the ground—securing adequate funds, maintaining demand-driven employment, and deploying an inclusive, worker-friendly technology. The questions surrounding the new law are likely to define the political battle over rural employment after VB-G RAM G formally replaces MGNREGA on July 1.