New Delhi: The Union government has released the draft rules for the Viksit Bharat Guarantee for Rozgar and Ajeevika Mission (Gramin) (VB-G RAM G), which is set to replace the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) on July 1, 2026. The proposed rules, open to public for objections and suggestions until June 21, include employing the 16th Finance Commission’s horizontal devolution formula to determine central allocations.The government claims that with this larger and poorer states will receive higher funding under the scheme. Furthermore, from the second year onwards, an unspecified percentage of allocations will also be tied to ‘performance criteria’, judging how well states have implemented the scheme.According to a report by The Hindu, the rules were notified through eight different gazette notifications. The allocation formula is said to be based on metrics like the 2011 Census population, demographic performance, per capita Gross State Domestic Product (GSDP), forest cover and Gross Domestic Product contribution. The largest share, 42.5% weightage, will be given to GSDP, which denotes how far a state’s per capita income falls below the wealthiest states, prioritising poorer sates. The performance criteria will also include “timely payment of wages,” “compliance with social audit requirements” and “percentage of completion of works.”Also read: How VB-G RAM G Prioritises Labour Availability Over Income Security and Workers’ Ability to NegotiateA consequential alteration under the new scheme, which has received criticism from the opposition as well as some experts, is the shifting of financial costs from the Union to the states. Under MGNREGA, the Union government used to pay the entire wage costs, whereas VB-G RAM G enacts a 60:40 split between the centre and the states. While states remain legally obligated to provide employment and pay unemployment allowances, they now bear a considerably large proportion of the costs.The draft rules also notify provisions to oversee the transition from MGNREGA to VB-G RAM G, stating that ongoing work will continue, pending liabilities will be settled and existing e-KYC-verified job cards will remain valid until new Gramin Rozgar Guarantee cards are issued. The rules also mention grievance redressal mechanisms, institutional frameworks and the formation of a 16-member National Level Steering Committee, including a minimum of five state representatives, to guide the implementation and the allocation of funds.Moreover, the new law moves away from the demand-based approach employed under MGNREGA, which was designed to expand the scheme’s budget to match the on-ground demand. The shift to VB-G RAM G will have far-reaching implications, with more than half of India’s population living in rural areas, a large proportion of which, depends on governmental welfare-schemes for their livelihood and well-being.