Context
- The Central Government has fixed a national floor wage of ₹300 per day under the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA). The revised wage rates will come into effect from October 1, ensuring that no State offers wages below the prescribed national minimum.
Key Highlights
- The Floor Wage Rule: The Central government has set a minimum baseline wage of ₹300 per day under the VB-G RAM G Act.
- Impact on States: 21 States and Union Territories that previously offered less than ₹300/day under MGNREGA have had their wages automatically bumped up to meet this baseline. States already paying above ₹300 saw comparatively smaller adjustments.
- State-Wise Trends (Highs & Lows):
- Highest Wage Rate: Haryana continues to hold the highest regular wage rate at ₹409 per day (excluding a special rate of ₹450 applicable to certain gram panchayats in Sikkim).
- Other Top States: Goa (₹406) and Kerala (₹401) are the only other states offering daily wages above ₹400.
- Lowest Increase: Telangana recorded the absolute lowest increase of just ₹1 (a 0.33% rise from ₹307 to ₹308). Wages remained completely unchanged from former MGNREGA levels in the UT of Dadra and Nagar Haveli and Daman and Diu.
Background of Rural Employment and Development Policy in India
- India’s wage employment initiatives progressed through multiple phases, beginning with early programmes such as the Rural Manpower Programme (1960s) and the Crash Scheme for Rural Employment (1971).
- 1980s–1990s: National Rural Employment Programme (NREP) and Rural Landless Employment Guarantee Programme (RLEGP) were later merged into the Jawahar Rozgar Yojana (JRY).
- A major shift came with the Maharashtra Employment Guarantee Act of 1977, which introduced the concept of a statutory right to work.
- These experiences culminated in the enactment of the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) in 2005, providing a nationwide legal framework for rural employment generation.
MGNREGA Evolution and the Limits of Incremental Reform
- Enacted in 2005 to enhance livelihood security in rural areas.
- Guarantees 100 days of wage employment every financial year to every rural household willing to undertake unskilled manual work.
Rationale for a New Statutory Framework
- The need for reform is also rooted in broader socio-economic changes. MGNREGA was built in 2005, but rural India has transformed. Poverty levels declined from 27.1 per cent in 2011-12 to 5.3 per cent in 2022-23.
- The Viksit Bharat- G RAM G Act, 2025 responds to this context by modernising rural employment guarantees, strengthening accountability, and aligning employment creation with long term infrastructure and climate resilience goals.
About Viksit Bharat- G RAM G Act 2025
- Employment guarantee increased from 100 days to 125 days per rural household in a financial year.
- Introduces a national minimum wage floor of ₹300 per day, with states free to pay higher wages.
- Emphasises GIS-based planning, satellite mapping, and digital monitoring for project implementation.
- Overall implementation is overseen by the Ministry of Rural Development.
Funding Pattern between the two Schemes
| Category | MGNREGA | VB–G RAM G |
| Labour wages | 100% by Centre | 60:40 ratio |
| Material costs | 75:25 ratio | 60:40 ratio |
| Administrative expenses | 75:25 ratio | 60:40 ratio |
| Number of guaranteed workdays | 100 | 125 |
| Exceptions for any States or Union Territories | None | 90:10 ratio in total expenditure for NE States, Himachal Pradesh, Uttarakhand, and Jammu and Kashmir. Full expenditure to be borne by the Centre for UTs without legislatures |
With reference to the Viksit Bharat–Guarantee for Rozgar and Ajeevika Mission (Gramin) Act, 2025 (VB–G RAM G Act), consider the following statements:
1. It increases the guaranteed wage employment from 100 days to 125 days per rural household in a financial year.
2. It prescribes a national minimum wage floor of ₹300 per day, while allowing States to pay higher wages.
3. The overall implementation of the Act is overseen by the Ministry of Labour and Employment.
4. Under the Act, the total expenditure is shared in a 90:10 ratio between the Centre and States for all States.
Which of the statements given above is/are correct?
(a) 1 and 2 only
(b) 1, 2 and 3 only
(c) 2, 3 and 4 only
(d) 1, 2, 3 and 4
Answer: A. 1 and 2 only
Explanation:
• Statement 1 is Correct – Employment guarantee has been increased from 100 to 125 days.
• Statement 2 is Correct – The Act introduces a ₹300/day national floor wage, while States may prescribe higher wages.
• Statement 3 is Incorrect – The Act is implemented by the Ministry of Rural Development, not the Ministry of Labour and Employment.
• Statement 4 is Incorrect – The 90:10 funding ratio applies only to North-Eastern States, Himachal Pradesh, Uttarakhand, and Jammu & Kashmir, not to all States.