Rules not ready for new rural jobs Act

Viksit Bharat – Guarantee for Rozgar and Ajeevika Mission (Gramin) Bill, 2025There are several steps that need to be taken before this law, which was adopted by the Parliament within two days of its entry into force on December 16 last year, can be put into practice. The new rural employment legislation replaces the Mahatma Gandhi National Rural Employment Guarantee Act, 2005 (MGNREGA), which was the flagship scheme of the Congress-led UPA government.

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According to sources, the Union Ministry of Rural Development holds weekly consultative meetings with State Governments. The Center has several difficult issues to resolve, including the “normative allocation” formula for states. Section 4(5) of the legislation says: “The Central government shall determine the state-wise normative allocation for each financial year based on objective parameters as may be determined by the Central government.” This article aims to ensure a more equitable distribution of resources, following complaints from many economically weaker States that they received smaller proportions of funding. These objective parameters have not yet been finalized.

“While some State governments, which are among the top performers under MGNREGA, have argued that the target parameters should also take into account their past performance, other States have argued that the parameters should reflect the demand in a State, especially those with high rates of rural labor migration,” said a senior official in the Ministry of Rural Development.

The legislation requires all Gram Panchayats to be classified as A, B or C based on development parameters. The law mentions just one example of what these “development parameters” might include – “proximity to urban areas.” Currently, the Center in consultation with States is working on framing these parameters. This classification is intended to meet the “changing needs of Panchayats” as stated in the law.

A senior official said that for the plan to be implemented, State governments must have at least five key elements in place. These include ensuring that ongoing work under the old legislation (MGNREGA) is completed. Secondly, States need to register themselves on DBT Sparsh, a banking platform. For the first time since the launch of the rural employment scheme, the Center and States will share the financial burden. According to sources, West Bengal is yet to register on the platform. Thirdly, the ongoing work to carry out e‑Know Your Customer (EKYC) verification of MGNREGA business cards needs to be completed. Currently, 83% of active employees, defined as those who have worked under the program at least once in the last three years, have completed eKYC. These eKYC-enabled business cards will continue to be valid under the VB-G RAM G Act until the government replaces them with a smart card, the senior official said. Finally, State governments should incorporate Yuktdhara, a geospatial planning portal that the Center wants to be used to prepare the Viksit Gram Panchayat plan and which will act as the master schedule of all works planned for the year.

The center also needs to create rules under eleven categories, for example, social audit of the programme.

The new legislation may not be ready for use until April 1 this year, sources said. From the day the new Act is notified by the Center (which will be considered as the start date), State governments will have six months to implement the scheme.

The Union Budget allocated ₹ 95,692.31 crore for VB‑GRAM G and ₹ 30,000 crore for MGNREGS, taking the total allocation for the two rural employment managers to ₹ 1,25,692.31 crore. The government has projected this as an increase of 43% over the Revised Estimate for MGNREGS of ₹88,000 crore in 2025-26.