New Employment Act Replaces MGNREGA

Summary of the Viksit Bharat - Guarantee for Rozgar and Ajeevika Mission (Gramin) (VB-G RAM G), 2025 Act

Constitutional References

• Article 21: Guarantees the right to life and has been interpreted by the Supreme Court to include the right to livelihood (Olga Tellis v. Bombay Municipal Corporation, 1985).
• 73rd Constitutional Amendment: MGNREGA reinforced panchayat raj institutions.

Legislative Context

• VB-G RAM G Act, 2025: Replaces MGNREGA; received Presidential assent.
• The Supreme Court (Swaraj Abhiyan case, 2018) mandated compensation from the Union government for delays in MGNREGA payment, which is not mirrored in the new Act.

Key Features of MGNREGA

• Implemented as a justiciable right to work, unemployment allowance, timely wage payments, and gender wage parity.
• Strengthened rural income and community empowerment.
• A study indicated a 21% decrease in reliance on money lenders and increased school enrollment.
• Approximately 45% of female workers engaged in MGNREGA transitioned from non-work to active employment, with female participation averaging 58% over five years.

VB-G RAM G Act Changes

• Governance Structure: Grants discretionary powers to the Union government regarding public works (Section 5(1)).
• Funding Structure: Altered from a 90:10 (Centre:States) ratio under MGNREGA to 60:40 for the new Act (Section 22).
• Introduces a command-driven allocation model, risking local autonomy essential to MGNREGA.

Unemployment Provisions

• Proposes 125 days of employment per household annually, although current average workdays hover around 50 due to funding uncertainties.
• Employment provisions include 60 days of no work during agricultural seasons, potentially exacerbating inequalities.

Economic Implications

• Concerns over state ability to provide employment as fiscal constraints could limit work demand, leading to increased unemployment and migration.
• MGNREGA’s 5 positive outcomes: (a) universality, (b) increased rural incomes, (c) countering inequalities, (d) creation of quality assets, (e) community empowerment.

Criticism and Consequences

• Underfunding: Lead to wage payment delays and corruption, potentially worsening with VB-G RAM G.
• Concerns regarding local governance principles being undermined.
• No new anti-corruption mechanisms introduced in the new Act.

International Recognition and Comparisons

• MGNREGA recognized by the World Bank as a "stellar example" of rural development in 2014, reversing earlier criticism.
• Viewed as a combination of Mahatma Gandhi's local governance ideology and B.R. Ambedkar's empowerment principles.

This summary encapsulates the transition from MGNREGA to VB-G RAM G, highlighting constitutional framings, legislative changes, socio-economic impacts, and critical evaluations.