The Centre's new rural employment law, the Viksit Bharat - Guarantee for Rozgar and Ajeevika Mission (Gramin) Act, 2025 (VB-G RAM G Act), came into force on July 1, replacing the existing wage structure under the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA).

The law revises wage rates nationwide and increases the guaranteed employment period from 100 to 125 days. For Kerala, it means one of the highest daily wages in the country. However, the hike is smaller than in many other states because Kerala's wages were already among the highest.

What is the VB-G RAM G Act?
The new law replaces the existing wage structure under MGNREGA with revised rates for all states and Union Territories. The national average daily wage has increased from ₹298.80 to ₹327.40, an average increase of ₹28.60 or more than 10 per cent.

How much will workers in Kerala get?
Kerala's daily wage has been fixed at ₹401, up from ₹369 in 2025-26.

Only a few regions have higher wages:

• Sikkim's high-altitude gram panchayats (Gnathang, Lachung and Lachen): ₹450
• Haryana: ₹409
• Goa: ₹406
• Kerala: ₹401

Although the increase is only 8.67 per cent, Kerala's wage remains 33.67 per cent higher than the new national minimum of ₹300.

Why is Kerala's increase lower?
Kerala has consistently been among the better-paying states under MGNREGA.

Between 2020-21 and 2025-26, the state's daily wage increased from ₹291 to ₹369, a growth of 26.8 per cent under the inflation-linked wage revision system. Since Kerala had already crossed the ₹300 mark, it did not require the steep increase seen in lower-wage states.

Which states have seen the biggest hike?
The Centre has introduced a national minimum wage of ₹300 under the new programme. As a result, states that were paying well below this level have received the biggest increases.

The top gainers are:

• Arunachal Pradesh: Wage increased from ₹241 to ₹300, a rise of 24.48 per cent.
• Nagaland: Wage increased from ₹241 to ₹300, also a 24.48 per cent increase.
• Himachal Pradesh (non-scheduled areas): Wage increased from ₹247 to ₹300, up 21.46 per cent.
• Himachal Pradesh (scheduled areas): Wage increased from ₹309 to ₹375, a 21.36 per cent rise.
• Uttar Pradesh: Wage increased from ₹252 to ₹300, an increase of 19.05 per cent. Uttarakhand has also recorded the same percentage increase.
• Bihar, Jharkhand, West Bengal and Assam have also recorded increases ranging between 15 and 25 per cent.

Which states saw only a small increase?
States that were already paying more than ₹300 under the earlier system have seen only modest revisions.

Some examples are:

• Telangana: 0.33 per cent
• Maharashtra: 1.60 per cent
• Andhra Pradesh: 1.63 per cent
• Kerala: 8.67 per cent

Which states recorded the highest growth over the past five years?
Under the previous MGNREGA system, wages were revised annually based on inflation.

Between 2020-21 and 2025-26, the biggest increases were recorded in:

• Chhattisgarh: Up 37.37 per cent, from ₹190 to ₹261.
• Madhya Pradesh: Up 37.37 per cent, from ₹190 to ₹261.
• Goa: Up 35 per cent, from ₹280 to ₹378.
• Karnataka: Up 34.55 per cent, from ₹275 to ₹370.
• Meghalaya: Up 33.99 per cent, from ₹203 to ₹272.

Despite these sharp increases, Chhattisgarh and Madhya Pradesh still remained among the lower-paying states because they started from a much lower wage base.

What else changes?
The biggest change under the new law is the increase in guaranteed employment. Eligible rural households can now avail 125 days of wage employment, compared with 100 days under the earlier scheme.

Will existing job cards remain valid?
Yes. The Rural Development Ministry has said existing e-KYC-verified MGNREGA job cards will remain valid until new Gramin Rozgar Guarantee Cards are issued.

What kind of work will continue?
Gram panchayats will continue to implement the programme, with priority given to: Water conservation, natural resource management, agriculture and allied activities, rural infrastructure and women's empowerment.

How much has the Centre allocated?
The Centre has made an interim allocation of ₹95,692.31 crore to states and Union Territories to ensure timely wage payments and uninterrupted implementation of works.

How has the Centre-State funding pattern changed?
The VB-G RAM G Act, 2025 brings a significant change in how the rural employment programme is financed. Under the earlier MGNREGA framework, the scheme was largely funded by the Centre. It bore 100 per cent of the wage cost for unskilled workers, while the material component and administrative expenses were shared in a 75:25 ratio between the Centre and the states. In practice, states accounted for only around 10 per cent of the programme's overall expenditure.

Under the new VB-G RAM G framework, the funding follows the model of a Centrally Sponsored Scheme (CSS). For general category states such as Kerala, the cost will now be shared in a 60:40 ratio, with the Centre contributing 60 per cent and the state government 40 per cent. For North Eastern and Himalayan states, the ratio is 90:10, while Union Territories with legislatures will also follow the 60:40 formula. The Centre will continue to bear the entire cost for Union Territories without legislatures.

Another major departure from MGNREGA is the introduction of a "normative allocation". Unlike the earlier demand-driven model, where the Centre met expenditure based on actual demand for work, the new law fixes a spending ceiling for each state in advance. If employment demand exceeds the Centre's sanctioned allocation, including when states provide up to the enhanced 125 days of employment, the additional expenditure will have to be borne entirely by the respective state government. States will also remain responsible for paying unemployment allowances and compensation for delays in wage payments.

Why has the new law attracted criticism?
Opposition parties and activists have raised concerns that the new framework could affect the demand-driven nature of the employment guarantee programme, reduce the role of states and gram panchayats, and face funding constraints. The Centre has rejected these concerns, saying the law will strengthen rural livelihoods, improve asset creation and make the programme more effective.

When will it be officially launched?
Although the Act came into force on July 1, its national launch will be held on July 2 at Mukkavaripalli village in Andhra Pradesh's Tirupati district. The event will include the distribution of Gramin Rozgar Guarantee Cards and awareness material.