Why India's New Rural Jobs Bill Matters More Than You Think

India has ushered in a significant shift in its rural employment policy, moving away from the two-decade-old Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA). The Lok Sabha recently passed the Viksit Bharat Guarantee for Rozgar and Ajeevika Mission (Gramin) – VB-G RAM G Bill, which replaces the prior legislation. This move, defended by Minister Shivraj Singh Chouhan as necessary to "fix" inherent challenges, signals a major policy pivot that will impact rural livelihoods across the nation.

Instead of a guaranteed right to work, the new bill emphasizes budget-constrained asset creation and infrastructure development. It aims to provide 125 days of rural employment annually, focusing on initiatives like water security projects, micro-irrigation, and robust infrastructure under the Viksit Bharat National Rural Infrastructure Stack. This approach seeks to build "fully developed villages" and address past issues of corruption and misallocation, which the government attributes to the previous scheme.

The shift, however, raises concerns among various groups, including opposition-led state governments. Critics fear the VB-G RAM G Bill could lead to centralized control and weaken states' fiscal autonomy, potentially transforming a guaranteed right into a benefit subject to administrative discretion and annual budget allocations. Such changes could exacerbate existing problems like delayed fund releases and unpaid wages, which have plagued the earlier scheme, where only 30% of wages were paid within the mandated 15 days.

Historically, MGNREGA saw significant employment generation in its early years, particularly in states with strong administrative capacities like Tamil Nadu and Andhra Pradesh. However, a plateau emerged around 2018-19, with budget constraints leading to a decline in employment and slower fund releases. The COVID-19 pandemic further exposed its limitations, with nearly 12% of households denied employment despite surging demand. Even now, nearly 80 lakh households seeking work remain unmet, especially during lean agricultural seasons.

The new bill introduces a 60:40 cost-sharing arrangement, creating a hard budget constraint for states. This fundamentally alters the scheme's nature, prioritizing labor-market management and infrastructure delivery over broad social protection. For many, MGNREGA embodied the ideals of Mahatma Gandhi, focusing on rural empowerment and reducing distress migration. The Congress Working Committee views the replacement as a "systematic murder" of the world's largest employment scheme, indicating a potential nationwide movement of opposition. This policy change holds profound implications for how India approaches social protection and rural development in the years to come.