India’s rural employment policy stands today at a historic crossroads. What began two decades ago as an emergency humanitarian response has gradually hardened into a permanent welfare architecture. The proposed VB Gram G Bill seeks to correct this drift—not by abandoning the rural poor, but by restoring dignity, productivity, and long-term economic value to rural work. Why MNREGA Was Necessary in 2005.

The MNREGA was enacted in 2005 at a time of acute rural distress. India was then facing recurrent droughts in rain-fed regions, agrarian distress and farmer suicides, widespread seasonal migration, fragile village infrastructure, and the near absence of social security mechanisms. MNREGA guaranteed 100 days of unskilled manual work per rural household as a humanitarian necessity. As economist Jean Drèze aptly observed, “MNREGA was designed as a safety net, not a growth engine.” The Scale of MNREGA: Big, but Costly Over the last two decades, MNREGA has grown into one of the world’s largest welfare programmes. More than fifteen crore job cards have been issued since inception, with seven to eight crore households demanding work annually. Cumulative expenditure has crossed Rs 11.57 lakh crore, while annual allocations frequently range between Rs 60,000 crore and Rs 90,000 crore. Yet the average employment generated per household remains around 45 to 50 days per year, significantly below the statutory promise of 100 days.

Pitfalls of MNREGA

1. Low Actual Employment Provided — Despite the legal guarantee of 100 days per household, average days worked remain stuck around 45–55 days, and in Telangana it is not even 28 days.

2. Delayed Wage Payments — Wages are often not disbursed within the mandated 15 days.

3. Inadequate Wage Rates — Nominal wages (Rs 241–Rs 400 per day in 2025–26 depending on the state) have not kept pace with inflation.

4. Corruption and Leakages —  Gujarat, Punjab, and other states reported over one crore fake job cards.

5. Poor Quality of Assets Created — Many works suffer from substandard construction and weak maintenance.

6. Centralisation and Reduced Local Governance — Over-reliance on centralized MIS systems and digital attendance apps.

7. Exclusion and Inequities — Vulnerable groups including women, SC/ST communities, and remote regions face barriers due to caste-based discrimination and digital connectivity gaps.

8. Labour Market Distortions — MNREGA has reduced farm labour availability during peak agricultural seasons.

9. Limited Impact on Structural Poverty — While it provides short-term relief and reduces distress migration, it has not significantly reduced structural poverty.

Nobel laureate Abhijit Banerjee has cautioned that “employment programs must eventually create productive capacity, or they become expensive holding operations.” India Has Changed — Policy Must Too India in 2025 is fundamentally different from India in 2005. Nearly all villages are electrified, rural roads have expanded under PMGSY, digital payments and Aadhaar-based systems are widespread, and skill shortages now dominate policy discussions more than sheer unemployment. Climate change has added urgency to water conservation, soil productivity, and sustainable agriculture.

With PM Garib Kalyan Yojana, hunger has largely been addressed. Poverty, which stood at 28% in 2005, has reduced to nearly 5% in 2025. Opportunity Cost of MNREGA Spending With Rs 11.53 lakh crore spent on MNREGA, India could have built 4.6 crore permanent houses, created 1.15 lakh km of 4-lane national highways and 11.5 lakh km of rural roads, established 19,000 modern 100-bed government hospitals and 2.3 lakh digitally enabled government schools, developed 1,150 world-class universities, provided 57 crore household tap water connections, expanded irrigation to 11.5 crore hectares, laid 1.15 lakh km of new railway lines, and installed 2.8 lakh MW of solar power capacity. Yet after spending such a massive amount, no visible capital asset base exists in most villages under MNREGA.

VB Gram G Bill (Viksit Bharat – Guarantee for Rozgar and Ajeevika Mission – Gramin): A Structural Upgrade the VB Gram G Bill is built on a simple principle: wages, works, and worthy asset creation. It does not dilute social justice; it modernises it. Its core philosophy is straightforward — government must guarantee productive work, not perpetual wage dependence. Employment is directly linked to measurable economic outcomes. Works are aligned with village development plans, and assets must deliver tangible long-term returns. 1) From Unskilled Labour to Skilled Livelihoods : VB Gram G integrates skills with employment. Workers are mapped according to aptitude and provided on-site training with certification in masonry, electrical work, water management, solar maintenance, agri-logistics, and allied sectors. 2) Village as an Economic Unit : VB Gram G places the village at the centre of development planning. Each village prepares a five-year growth plan focusing on: 1) Water security 2) Agricultural productivity 3) Rural infrastructure4) Climate resilience. Funds flow only to productivity-linked assets approved under these plans, ensuring alignment between expenditure and local economic priorities. 3) From Central Planning to Gram Panchayat Planning: The needs of each Gram Panchayat are best understood locally.

Therefore, planning authority and fund utilization are shifted to Gram Sabhas, restoring grassroots democracy and accountability. 4) Budget Reform: Demand-Based to Normative Allocation : Annual budget allocation is structured at Rs 1,51,282 crore, of which the Central Government contributes Rs 95,692 crore, while states bear 40% of the cost, improving ownership and accountability. India has approximately 2.60 lakh Gram Panchayats. Under this model. Each village receives about Rs 50 lakh per year and Over five years, this becomes Rs 2.5 crore per village. This is a substantial capital base for rural transformation. 5) Technology to Plug Leakages: The system integrates AI-enabled monitoring, geo-tagged works, Aadhaar-linked biometric attendance, real-time dashboards, compulsory social audits, and asset verification to ensure transparency and accountability. 6) Workday Reform: Instead of 100 days, guaranteed employment is increased to 125 days, with an additional 25 days for forest and tribal regions.

Payments must be released within 15 days, failing which workers receive interest compensation. A 60-day operational pause is introduced during peak agricultural seasons to avoid labour shortages for farmers. 7) Administrative Strengthening: Administrative expenditure is increased from 6% to 9%, enabling stronger supervision, professional project management, and better corruption control. Conclusion: Reform Is Not Rejection MNREGA was right for its time. VB Gram G is right for ours. A nation aspiring to become a five trillion-dollar economy cannot anchor its villages to a permanent distress framework designed for 2005. 

(Dr. Boora Narsaiah Goud Vice President – BJP Telangana Former MP, Bhongir)