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VB-G RAM G Replaces MGNREGA: States' Expenditure Burden Rises 6-Fold to ₹51,000 Cr

Target:UPSC GS-IIMPSCSSC GATeachingPrelims HighMains MediumStatic GK Link
02 Jul 2026
~2 min
Source: The Hindu
Key Data:₹51,000 crore₹7,700 crore₹95,692.31 crore60:40 ratio125 days25% increase assumption
Bodies:Ministry of Rural Development
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What This Article Covers

1.VB-G RAM G (Viksit Bharat Guarantee for Rozgar and Ajeevika Mission Gramin) replaces MGNREGA from July 1, 2026, changing the funding pattern from ~90:10 to 60:40 (Centre:State).

2.States' expenditure could increase nearly 600% – from ₹7,700 crore in 2024-25 to an estimated ₹51,000 crore in 2026-27, excluding West Bengal.

3.The Centre will determine 'normative allocations' based on objective parameters, while states bear full responsibility for extra costs, unemployment allowance, and compensation for delays.

The Big Picture
Prelims · HighMains · Medium

The Centre has overhauled MGNREGA with VB-G RAM G, shifting a major financial burden to states. States’ expenditure is projected to skyrocket six-fold from ₹7,700 crore (2024-25) to at least ₹51,000 crore (2026-27) due to a new 60:40 cost-sharing pattern. This move, effective July 1, 2026, has raised serious concerns among states about fiscal sustainability.

Exam Lens

Quick Exam Facts From News

States' Expenditure Increase6-fold (₹7,700 cr → ₹51,000 cr)
New Cost-Sharing Ratio60:40 (Centre:State)
Interim Allocation by Centre (2026-27)₹95,692.31 crore
Guaranteed Employment Days125 days per household
Pending Dues (2025-26)₹20,422 crore
States with Highest Projected IncreaseUttar Pradesh, Tamil Nadu, Bihar (600-800%)

1-Minute Revision

  • ›States' Expenditure Increase: 6-fold (₹7,700 cr → ₹51,000 cr)
  • ›New Cost-Sharing Ratio: 60:40 (Centre:State)
  • ›Target this Data: States' expenditure increase from ₹7,700 crore (2024-25) to ₹51,000 crore (2026-27) - nearly six-fold.
  • ›Target this Nodal Body: Ministry of Rural Development (implementing VB-G RAM G).
  • ›Target this Legal Point: MGNREGA Act 2005 replaced by VB-G RAM G (Viksit Bharat Guarantee for Rozgar and Ajeevika Mission Gramin) effective July 1, 2026.

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

Q1Static LinkageEasy

Which ministry is responsible for implementing the Viksit Bharat Guarantee for Rozgar and Ajeevika Mission (Gramin) (VB-G RAM G)?

Q2Statement-basedHard

Consider the following statements regarding the replacement of MGNREGA by VB-G RAM G:

1. Under VB-G RAM G, the Centre decides a normative allocation for each state based on objective parameters.

2. The new cost-sharing ratio between the Centre and states is 75:25.

3. States are now fully responsible for any expenditure beyond the normative allocation.

Which of the statements given above is/are correct?

Q3Data-centricMedium

According to The Hindu analysis, what is the projected states' expenditure under VB-G RAM G for 2026-27 (excluding West Bengal)?

Q4Application/ImpactMedium

What is the primary financial implication of the shift from MGNREGA to VB-G RAM G for states?

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