Opacity continues to surround the VB-G RAM G Act as the new financial year approaches. The Union Budget includes an allocation of Rs 95,692 crore in 2026-27, in line with the Act’s Financial Memorandum. However, there is still no indication whatsoever of the corresponding “state-wise normative allocations”, as the Act calls them. This puts state governments in a difficult position: How are they supposed to make a provision for their 40% share of these unknown allocations in their own budgets?Under the VB-G RAM G Act, state-wise normative allocations are to be determined by the Union government based on “objective parameters”. The Union, of course, will be the arbiter of objectivity. Since the Act does not explain what the parameters are supposed to capture, there is plenty of leeway. In the age of artificial intelligence, picking parameters that lead straight to a pre-determined pattern of state-wise allocations would not be difficult.More likely, the Union government will ask an institution like NITI Aayog to come up with parameters that have a semblance of objectivity. As it happens, we can get an inkling of the likely parameters, and the corresponding state-wise allocations, from a recent report of SBI Research, a research cell of the State Bank of India. The report, titled “VB-G RAM G: The Stepping Stone Towards Responsible & Agile Gram Swaraj with a Jan Bhagidari Momentum”, was released at intriguing speed, just eight days after the Act received the assent of the President on December 21, 2025.The report is not exactly brilliant, but it has some useful numbers, explicit and implicit. The authors explore a “hypothetical scenario” for state-wise normative allocations (more precisely, the Union’s share of these allocations). Though hypothetical, this scenario seems to be more than illustrative. It looks like a kind of “first shot” at what the normative allocations might be.In this hypothetical scenario, there are seven parameters. Three of them stand for “equity” and four for “efficiency”. It is not easy to make sense of these parameters, but let us leave that aside and focus on the corresponding state-wise allocations. These allocations, unfortunately, are not presented, nor did SBI Research respond to a request for the figures. However, the allocations can be inferred from a table (page 15) called “Allocation Difference (Rs crore) – Normative vis-s-vis Average FY 19-25 ex 20-21” in the report.The table presented by SBI’s research arm on page 15 of its report, published soon after VB-G RAM G gained the President’s assent, both taking place in December 2025. Source: https://sbi.bank.inThis table presents, for each of 16 major states, the difference between normative allocation in this hypothetical scenario and the average MG-NREGA allocation in the seven-year period from 2018-19 to 2024-25, excluding 2020-21.These differences are of little interest, because a seven-year average of MG-NREGA expenditure in money terms (without any adjustment for inflation) is a very odd basis of comparison. However, we can use the figures to reconstruct the normative allocations implicit in these differences. To do so, we simply add to these “difference” figures our own estimates of average MG-NREGA allocations in the relevant period (using official data presented in Rajya Sabha).Also read: VB–G RAM G Bill Formalises MGNREGA DisintegrationThe results are presented in the table below. The first column presents our estimates of the normative allocations implicit in the SBI report (Union’s share only). The second column presents the difference between these allocations and what state allocations would be if the same grand total (Rs 86,890 crore for these 16 states) were distributed across states in the same way as MG-NREGA funds – taking average MGNREGA allocations in the last three complete financial years as the base.If the difference is positive, it means that a state gains from the switch to normative allocations.* Difference between estimated normative allocation and what the state would receive if the grand total (Rs 86,890) were distributed in the same way as MG-NREGA funds in the last three years (see text). States are ranked in descending order of this difference.With the grand total unchanged, there are both gainers and losers (7 and 9 states, respectively). A little more than 10% of the grand total of Rs 86,890 is redistributed from losers to gainers – not a huge amount. The big gainers (more than Rs 500 crore each) are Maharashtra, Uttar Pradesh, Chhattisgarh and Gujarat, in that order. The big losers (also more than Rs 500 crore) are Tamil Nadu, Andhra Pradesh, Rajasthan, Bihar and Kerala. There are well-off and poor states in both lists.Overall, it is hard to see a pattern of redistribution from better-off to poorer states, the stated intention of normative allocations. In fact, it is hard to see any logic at all in this redistribution. (The same conclusions hold if all figures are put in per-capita terms, using rural population as denominator.)The normative allocations in the first column of Table 1 refer to the Union government’s share only, but we can easily calculate the corresponding state shares. These are presented in the last column. Maharashtra and Uttar Pradesh, the big gainers in the shift to normative allocations, gain at price: They will have to match the enhanced Union government’s share with contributions of more than Rs 4,500 crore and Rs 9,000 crore (respectively) from their own budgets.Most states will have to contribute thousands of crores at short notice, without the amounts being clear in advance of their 2026-27 budget exercises. Further, if the demand for work in any state exceeds what can be provided within the normative allocation, the state government will have a legal obligation to fund 100% of the extra costs.All these calculations are illustrative, since the scenario presented in the SBI report is supposed to be “hypothetical”. Still, three useful lessons emerge. First, there is no guarantee whatsoever that normative allocations will lead to a more rational or equitable distribution of funds across states. Second, if the SBI scenario is for real, and not “hypothetical”, it needs to go back to the drawing board. Third, the confusion around normative allocations is symptomatic of an Act that serves no clear purpose other than handing over control and credit to the Union government. It is not too late for a U-turn, since MG-NREGA stands unless and until it is repealed under Section 37 of the VB-G RAM G Act.Jean Drèze is Visiting Professor at the Department of Economics, Ranchi University. Rahul R. is a graduate student at the Indian Statistical Institute, Kolkata.