SBI Research has said that the Viksit Bharat- Guarantee for Rozgaar and Ajeevika Mission (Gramin) or VB-RAM G Bill marks a major overhaul of the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA), aiming to fix long-standing structural weaknesses while strengthening transparency, planning, and accountability in rural employment.

According to the report, the new framework seeks to bring “transformative practices” in project selection, productive asset creation, income generation, and monitoring — areas where the current system has often struggled.

Under the redesigned scheme, central assistance is expected to rise to nearly Rs 96,000 crore by FY27.

The states’ contribution will also increase, but SBI Research pointed out that nearly 55% of the Centre’s gross tax revenue is already shared with the states through devolution and grants.

“States may need to reorient their expenditure towards more productive purposes,” the report suggested.

Based on a simulated scenario assessing seven parameters of equity and efficiency, SBI Research estimated that states could collectively gain around Rs 17,000 crore compared to the average allocations of the past seven years. Most states are likely to emerge as net gainers, it added.

The revised Act also expands the scope of permissible works, which could help increase the average employment days to 125 from the current 50.4 per household (against the guaranteed 100 days). Stronger state participation and a stricter penalty mechanism are expected to reduce the gap between work demanded and work provided, which has hovered around 14% since FY20.

Addressing wage concerns — a key weakness of the earlier system — the report said compensation hikes had been uneven over the years, leading to poor demand-supply balance. The VB-RAM G design aims to fix this mismatch with better wage alignment and efficiency measures.

VB Ram G Bill

VB-G RAM G Bill set to revamp rural jobs scheme with focus on efficiency: SBI Report