As is known by now, the Union government has introduced a new Bill titled ‘The Viksit Bharat—Guarantee for Rozgar and Ajeevika Mission (GRAMIN): VB—G RAM G (विकसित भारत—जी राम जी) Bill, 2025’, which, if passed, will repeal and replace the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA), 2005. A preliminary reading of the Bill raises several concerns. We discuss some of the major issues here, while noting that this is not an exhaustive analysis and many details remain unclear at this stage.Several issues plague MGNREGA implementation, particularly low wage rates and delay in wage payments. These are further exacerbated by the exclusions and delays caused by recent ‘reforms’ such as digital verification of attendance, Aadhaar-based bank payments and so on. Although it is a demand-based scheme, there are budgetary constraints and gaps in recording true demand with less-than-optimal amount of work being provided. Only around 7% households on average completed 100 days of work during the last few years and the average number of days worked per household has been around 45 per year. This does not mean that there is no requirement for more work, but the system of providing work and recording demand has been such that the scheme has not been responsive enough. The proposed Bill provides ‘not less than 125 days of guaranteed employment in a financial year’, increasing from 100 days in MGNREGA. However, most of the issues raised by workers remain unaddressed while shifting the spirit of the legislation away from providing rights-based entitlements towards ‘enabling them (rural households) to participate more effectively in the expanded livelihood security framework’ (words in parenthesis added). There is repeated mention of being aligned with the vision of the Viksit Bharat @2047, although nothing is said in the objectives about ensuring the right to work. From demand-driven to allocation-drivenUnder MGNREGA, while the Union government makes some tentative allocations in the Union Budget, technically, since the scheme is demand-based, the budget is supposed to be revised as and when the need arises. Earlier this year, the Minister of State for Rural Development in a written reply in Rajya Sabha stated: “Since Mahatma Gandhi NREGS is a demand driven wage employment Scheme budgetary outlay is determined based on the anticipated demand for employment in a particular financial year. The Ministry undertakes regular assessments of fund requirements based on demand and seeks additional funds under Mahatma Gandhi NREGS from the Ministry of Finance as and when required for meeting the demand for work on the ground.” The budgetary allocations for MGNREGA have been consistently falling since the last five years, yet at least in principle, the demand-based principle was retained in the Act. The Bill on the other hand introduces budgetary limits in the Act itself. The Bill states, “The Central Government shall determine the State-wise normative allocation for each financial year, based on objective parameters as may be prescribed by the Central Government. Any expenditure incurred by a State in excess of its normative allocation shall be borne by the State Government in such manner and by such procedure as may be prescribed by the Central Government.” [Section 4(5) and 4(6)] Section 5(1) states:“Save as otherwise provided, the State Government shall, in such rural area in the State as may be notified by the Central Government, provide to every household whose adult members volunteer to do unskilled manual work, not less than one hundred and twenty-five days of guaranteed employment in a financial year in accordance with the Scheme made under this Act.”This indicates that the employment guarantee is being preserved, but then it is contradicted by the prescriptive normative allocations. Further it is not clear what the phrase ‘in such rural area in the State as may be notified by the Central Government’ means – are all villages and all rural households included or not? The Financial Memorandum estimates a total annual requirement of Rs 1,51,282 crore, including the state share. Of this, the estimated Central share is Rs 95,692.31 crore, less than what was allocated in the Union Budget in 2021-22. The states are expected to shell out the remaining amount of almost Rs 55,000 crores. Towards greater centralisationNot only does the Bill place a cap on allocations but also makes this a centralised decision, with the Union government having the power to determine the allocations and the state governments being penalised if they go beyond these norms. The Bill imposes a greater burden on states in other ways too. The cost-sharing under MGNREGA is such that the entire labour costs and 75% of the material costs are borne by the Union government, while the Bill proposes to implement the schemes under the new legislation through a 60:40 sharing pattern between Union government and states. This is the same pattern as in a several centrally sponsored schemes (CSS) currently, which adversely affect states, particularly those that are poorer. In a context where the space for state governments to raise their own resources has been shrinking, such a shift would have serious implications for how much work is provided.While a lot of space in the Bill is dedicated to setting out norms for decentralised planning where all works have to originate from the Viksit Bharat Gram Panchayat Plans, these are then aggregated into the ‘Viksit Bharat National Rural Infrastructure Stack, which shall comprise a comprehensive listing of works aligned with National development priorities’ [Sec 4(1)] and ‘integrated with the PM Gati Shakti National Master Plan, so as to enable spatially optimised infrastructure development’ [Sec 4(3)]. Schedule I of the Bill provides a list of works to be taken up under the Scheme, as well as a unified framework for convergence and integrated planning which basically sounds like notional decentralisation under stringent central ‘guidance’. Section 6(5) of Schedule I summarises:“This institutional architecture shall ensure a single-plan, multi-funding approach, promote convergence across departments and schemes, and align all rural development efforts with the Viksit Bharat 2047 vision of creating productive, resilient and transformative rural assets.” In line with many other centrally sponsored schemes in the recent past, this new scheme, if passed, would result in more power being vested in the Union government as far as design and attribution is concerned while the financial burden and implementation accountability is shifted to the state governments. More of the same…What this Bill does is to codify reforms that have been introduced over the last five years which have effectively resulted in the MGNREGA being diluted – such as mobile-based worksite monitoring, biometric authentication, use of AI for planning, audits and fraud-risk mitigation, caps on spending, delinking from minimum wages – several grassroots organisations and the NREGA Sangharsh Morcha have been repeatedly raising these issues in the media and with the government. The Bill is full of ‘aspirational’ statements such as this in the Statement of Objects and Reasons: “To cater to the changing aspirations, stronger convergence is required to establish an integrated, Whole-of-Government rural development framework covering several complementary Government schemes”. What this means is anybody’s guess.Dipa Sinha is a development economist.