Two BJP-led states challenge wage burden under VB-G RAM G

At least four of the 13 states objected to the system’s 60-day blackout period, proposed during the peak agricultural season. File | Photo credit: The Hindu

At least three states, two of them with BJP-led governments, have expressed concern over the increased financial burden on them under the new rural employment scheme, Viksit Bharat-Garantee for Rozgar and Aajeevika Mission (Gramin) (VB-G RAM G), which comes into effect on July 1.

Under the VB-G RAM G, most states are required to bear 40% of the total expenditure, unlike the previous legislation, the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA). Under MNREGA, the Center bore 100% of the wage cost and the states had to pay only a part of the material cost, which was only 10% of the total budget.

The Union Ministry of Rural Development shared this information in a Right to Information (RTI) application filed by Chakradhar Buddha of the National Campaign for People’s Right to Information (NCPRI). Mr. Buddha asked for records regarding the meetings and consultations organized by the Union Government with the States regarding VB-G RAM G and the transition from MGNREGA to the new system.

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In its reply, the government shared the responses of only 13 states. Five of them requested a revision of wage rates and four expressed reservations about the provision of 60 days of rest during the peak agricultural season. Almost all states pointed to delays in wages and related payments and sought timely clearance of dues.

Bihar, Madhya Pradesh and Jharkhand were the three states that specifically asked for a review of the proposed change in the funding scheme. As per the provisional allocation made under VB-G RAM G, Bihar will have to pay ₹4,477 crore. This amount is insufficient to meet the government’s promise of providing 125 days of work, according to an analysis by the NREGA Sangharsh Morcha. According to their analysis, Bihar will have to pay ₹15,939 crore to realize this target. Similarly, in the case of Madhya Pradesh, the burden on the state is ₹ 4,168 crore, which would only be enough to provide 43 days of work. For 125 days, the financial liability of the state will be ₹20,037 crore. To meet the 40% share, Jharkhand will have to disburse ₹1,804 crore as per the current allocation, which is only enough for 41 days. It will have to pay ₹9,293 crore to meet the 125-day commitment. Unlike Bihar and MP, two BJP-ruled states, Jharkhand had explicitly said during the post-legislative consultation that carrying a 40% share would be difficult for the state.

Even states like Sikkim and Uttarakhand, which fall under the 90:10 centre-state sharing model (applicable to North-Eastern and Himalayan states), have sought revision of the clause. Citing terrain-related issues, Uttarakhand argued that the Center should continue to bear 100% of the labor costs.

Five states are seeking wage increases

Out of 13 states, five states demanded an increase in the wages of rural workers. MGNREGA wages were well below the market rate. Bihar sought an increase in wages from the current ₹255 to ₹413, while Jammu and Kashmir sought an increase from ₹272 to ₹311. Both Jharkhand and Punjab argued that wages should be competitive and in line with market conditions. Highlighting the harsh landscape where people have to work, Uttarakhand sought a compensatory hike.

Blackout period

At least four of the 13 states objected to the system’s 60-day blackout period, proposed during the peak agricultural season. The government welcomed the break as an important step towards easy labor availability, while activists criticized it, saying it would reduce workers’ bargaining power. Among the states criticizing the clause was Punjab, which is heavily dependent on agriculture. Karnataka and Telangana, ruled by Congress governments, have also sought to review this shortfall.

Almost all the states have pointed out the delay in the clearing of wages and material by the center and demanded that this should be avoided under the VB-G RAM G.

Published – 27 Jun 2026 21:22 IST