MGNREGA, 2005 to 2026: Full Form, Features and the VB‑G RAM G Act That Replaced It

MGNREGA: Full Form, Meaning and the 2026 Repeal

What Was MGNREGA: The Rural Employment Guarantee Act, 2005

MGNREGA stands for the Mahatma Gandhi National Rural Employment Guarantee Act, 2005. It was enacted as the National Rural Employment Guarantee Act and published in the Gazette of India on 7 September 2005, and it was renamed after Mahatma Gandhi in 2009. The duty to provide the work lay with the State Government.

The guarantee began in 200 districts in February 2006, reached 113 more on 1 April 2007 and another 17 on 15 May 2007, and covered all remaining districts from 1 April 2008. The Ministry of Rural Development ran it with the States, and it made wage work a legal entitlement across the country. If work was not given on time, the State owed an unemployment allowance.

The idea had an Indian precedent. The Maharashtra Employment Guarantee Act of 1977 introduced a statutory right to work. Nationally, wage programmes ran from the Rural Manpower Programme of the 1960s through the National Rural Employment Programme to the Sampoorna Grameen Rozgar Yojana of 1999 before the 2005 Act.

VB‑G RAM G Act, 2025: The Law That Replaced MGNREGA

MGNREGA no longer exists. The Viksit Bharat Guarantee for Rozgar and Ajeevika Mission (Gramin) Act, 2025, known as VB‑G RAM G, was introduced on 16 December 2025 and passed by Parliament within two days. The Government notified on 11 May 2026 that it would come into force on 1 July 2026, and MGNREGA stood repealed from that day.

• More days: 125 days of wage work a household a year, instead of 100.
• Higher wage floor: No notified wage below ₹300 a day; the lowest wage before had been ₹241, and the national average rose from ₹298.8 to ₹327.4.
• Peak-season pause: States may notify up to 60 days of no work during sowing and harvesting, with the 125 days given in the remaining 305 days of the year.
• Four kinds of work: Water security, core rural infrastructure, livelihood infrastructure, and works to mitigate extreme weather.
• Administrative costs: Up to 9 per cent of spending may go on administration, against 6 per cent under MGNREGA.
• Transition: At the roll-out in July 2026, job cards verified through e-KYC stayed valid until Gramin Rozgar Guarantee Cards were issued, and every registered MGNREGA worker was moved to the new scheme.

MGNREGA Entitlements: 100 Days, Job Cards and Unemployment Allowance

The 100-Day Guarantee, the Job Card and the 15-Day Rule

The guarantee was for the household, not the person, and every rural household could claim it, not only households classed as poor. An adult, meaning anyone aged 18 or more, applied to the Gram Panchayat, which registered the household and issued a job card, the document that recorded its entitlements and protected workers against fraud.

• Work on demand: Work had to be given within 15 days of the application, or from the date sought in an advance application, whichever was later, and within 5 km of the applicant's home.
• Unemployment allowance: If work was not given in time, the State paid a daily allowance of at least one-fourth of the wage for the first 30 days and one-half for the rest of the year.
• Prompt wages: Wages were due weekly, or in any case within a fortnight, into the worker's bank or post office account.
• Delay compensation: 0.05 per cent of the unpaid wages for each day of delay beyond the 16th day after the muster roll closed.
• Equal pay: No discrimination between men and women in wages.

MGNREGA Wage Rate Under Section 6 and the Minimum Wages Act

Section 6 of the Act let the Central Government notify the wage rate for MGNREGA, with different rates for different areas, and set the rate at not less than ₹60 a day. Until the Centre fixed a rate for an area, the State's minimum wage for agricultural labourers under the Minimum Wages Act, 1948, applied.

The Consumer Price Index for Agricultural Labourers became the guide for revising MGNREGA wages. Rates differed widely between States, and in 2022 they ranged from ₹204 to ₹331 a day; just before the repeal the lowest notified wage was ₹241.

MGNREGA Works, the 60:40 Wage-Material Ratio and Funding

Permissible Works Under Schedule I: Four Categories

The work was meant to build durable assets, mostly for land and water. Schedule I of the Act grouped the permissible works into four categories.

1. A. Natural resource management: Water conservation and harvesting, watershed works such as contour trenches and bunds, minor irrigation, renovation of traditional water bodies, afforestation and land development on common land.
2. B. Individual assets for vulnerable sections: Land development, farm ponds and dug wells, horticulture, livestock shelters and fisheries infrastructure on the land of SC, ST and other priority households.
3. C. Common infrastructure for self-help groups: Storage and post-harvest facilities and common work sheds.
4. D. Rural infrastructure: Toilets, all-weather roads, village drains, flood protection, food grain storage and the upkeep of assets built under the Act.

Plans began in the village. Each Gram Panchayat prepared a development plan and a shelf of works, and the Gram Sabha decided the order of priority of the works in open meetings.

The 60:40 Wage-Material Ratio and Centre-State Cost Sharing

The Act kept the money with labour. The cost of materials, including the wages of skilled and semi-skilled workers, could not exceed 40 per cent of project costs, so at least 60 per cent went to unskilled wages; the ratio was kept at the Gram Panchayat level for works it executed. Contractors could not be engaged.

Because the Centre paid the whole wage bill, MGNREGA was demand-driven: Central funds followed the demand for work in each State. The 2025 Act ends both features. It splits wages 60:40 between the Centre and most States, and it replaces open-ended demand with a normative allocation that the Centre fixes for each State.

MGNREGA Governance: Gram Panchayat, Gram Sabha and Social Audit

Central and State Councils, Programme Officers and the Gram Panchayat

Delivery ran from the Ministry of Rural Development to the village. A Central Employment Guarantee Council and State Councils advised; the District Programme Coordinator and the block-level Programme Officer planned, sanctioned and paid; and the Gram Panchayat registered households, issued job cards, received applications and allotted work within 15 days.

Strengthening Panchayati Raj Institutions was one of the Act's stated objectives, alongside social protection, durable assets and the empowerment of women, Scheduled Castes and Scheduled Tribes. The Act also required that at least one-third of the non-official members of the Central Council be women.

The record was strongest for women, whose share of work rose from 48 per cent in 2013‑14 to 58.15 per cent in 2025‑26, well above the statutory minimum of one-third of workers. Wage payment also became digital: Aadhaar seeding expanded, and the Aadhaar-Based Payment System made electronic wage payments nearly universal.

Social Audit by the Gram Sabha and the MGNREGA Ombudsman

Section 17 made the Gram Sabha monitor the works and conduct regular social audits of every project, and the Gram Panchayat had to make the muster rolls, bills, vouchers and measurement books available to it. Under Schedule I, a social audit was due at least once every six months, with a concurrent audit of all works every month.

Each State also appointed an Ombudsman on the advice of a selection committee, and no member of a political party could hold the post. The Ombudsman received complaints from workers, ordered spot investigations and could act on its own motion.

MGNREGA's Record, Audit Findings and the Debate Over Its Replacement

CAG Audit of MGNREGA in Chhattisgarh: Demand, Delays and Days of Work

A performance audit by the Comptroller and Auditor General of India, for the period ending March 2024, showed the gap between the law and practice in Chhattisgarh. From 2019‑20 to 2023‑24, 152.36 lakh households demanded work and 134.10 lakh got it, a shortfall of about 12 per cent, yet no unemployment allowance was paid.

• Planning bypassed: About 86 per cent of works in the 48 Gram Panchayats checked were done without Gram Sabha approval.
• Staff: A 21 per cent shortage of human resources, and a 97 per cent shortfall in training.
• Assets: Only 61 per cent of works sanctioned from 2019‑20 to 2023‑24 were complete by October 2024.
• Inclusion: Women's participation ranged from 43 to 59 per cent, above the one-third minimum.

Why MGNREGA Was Replaced and the Debate Over Normative Funding

The Government's case was that MGNREGA had reached its limits. Monitoring had found works that did not exist on the ground, spending that did not match physical progress, machines used in labour-intensive works and digital attendance bypassed, and only a small share of households had completed 100 days after the pandemic. The Government also pointed to the fall in poverty from 27.1 per cent in 2011‑12 to 5.3 per cent in 2022‑23.

Critics focused on the money. Under MGNREGA the Centre paid the whole wage bill; under the new Act the Centre fixes a normative allocation, States pay 40 per cent, and work beyond the allocation falls on the State. Kerala's Assembly estimated an extra burden of ₹3,500 crore, and critics argued that a true guarantee needs demand-driven funding.

• Allocation formula: Draft rules published in May 2026 based each State's share on the 16th Finance Commission's devolution parameters, with the most weight on how far a State's income lags the richest.
• Performance link: From the second year, part of the allocation was to depend on timely wages, social audit compliance and completed works.
• Worker migration: Of 10.84 crore active workers, 10.27 crore had completed e-KYC by August 2026, and the Centre said pending e-KYC does not stop anyone from demanding work.