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VB-G RAM G Scheme from July 1: Normative Allocation via 16th FC Formula, Replaces MGNREGA with 60:40 Fund Sharing

Target:UPSC GS-IIIMPSCTeachingSSC GAPrelims HighMains HighStatic GK Link
22 May 2026
~2 min
Source: Indian Express
Key Data:125 days60:40 funding90:10 fundingJuly 1, 202642.5% weight for GSDP distance
Bodies:Ministry of Rural Development16th Finance Commission
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What This Article Covers

1.The VB-G RAM G Act, 2025 replaces the MGNREGS Act, 2005, guaranteeing 125 days of wage employment annually.

2.Fund allocation will be based on the 16th Finance Commission's formula, moving from demand-based to normative allocation.

3.The funding pattern shifts to a 60:40 Centre-State share for most states, with 90:10 for 11 special-category states.

The Big Picture
Prelims · HighMains · High

The new Viksit Bharat – Guarantee for Rozgar and Ajeevika Mission (Gramin) scheme, set to replace MGNREGS from July 1, will allocate funds to states using the 16th Finance Commission's horizontal devolution formula. This marks a shift from demand-driven funding to a normative allocation system, introducing state performance criteria and a new 60:40 Centre-State cost-sharing ratio for most states.

Exam Lens

Quick Exam Facts From News

Scheme Start DateJuly 1, 2026
Days Guaranteed125 days
Fund Share (General)Centre:State = 60:40
Fund Share (Special)Centre:State = 90:10 (11 states)
Replaced ActMGNREGS Act, 2005
New ActVB-G RAM G Act, 2025

1-Minute Revision

  • ›Scheme Start Date: July 1, 2026
  • ›Days Guaranteed: 125 days
  • ›Target this Data: 125 days of guaranteed employment under VB-G RAM G.
  • ›Target this Nodal Body: Ministry of Rural Development.
  • ›Target this Legal Point: Section 22(1) of VB-G RAM G Act for 60:40 fund sharing.
  • ›Target this Date: Scheme rollout from July 1, 2026.

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Practice exam-style questions, track your score, and strengthen your recall.

Q1Static LinkageEasy

Which ministry has released the draft rules for the normative allocation of funds under the VB-G RAM G scheme?

Q2Statement-basedHard

Consider the following statements regarding the Viksit Bharat – Guarantee for Rozgar and Ajeevika Mission (Gramin):

1. It guarantees 125 days of wage employment in a financial year to rural households.

2. Its fund allocation to states will be based entirely on the horizontal devolution formula of the 15th Finance Commission.

3. Under the Act, the fund-sharing pattern between Centre and States is 60:40 for all states without exception.

Which of the statements given above is/are correct?

Q3Data-centricMedium

According to the draft rules, what is the highest weighted parameter in the 16th Finance Commission formula used for VB-G RAM G fund allocation?

Q4Application/ImpactMedium

What is a key criticism or major change embodied in the VB-G RAM G Act compared to the previous MGNREGS?

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