New Delhi [India], December 29 : The newly enacted VB-G RAM G Act, which replaces the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA), is expected to bring more households into the rural employment framework, increase average days of work, reduce inefficiencies and boost consumption, according to a report by State Bank of India (SBI).
The report said the revamped Act is likely to increase the number of households working under the scheme from the current level of 5.8 crore households. During FY25, around 5.78 crore households worked under MGNREGA.
This number is broadly in line with the pre-COVID trend, when an average of around 5.0 crore households participated each fiscal year for an extended period.
VB-G RAM G Act is Viksit Bharat - Guarantee for Rozgar and Ajeevika Mission (Gramin).
SBI highlighted that the average days of employment per household are also expected to rise under the new Act due to a wider definition and expansion in the nature of permissible works.
Data shows that the average number of employment days increased from 45.9 days during FY07-FY13 to 50.4 days during FY21-FY25, against the guaranteed 100 days of employment. The report said the VB-G RAM G framework is likely to push this average higher.
The report also pointed to a persistent gap between work demanded and work provided, which has averaged around 14 per cent since FY20.
It said this gap exists because earlier works were often misaligned with changing economic priorities. Under VB-G RAM G, the Centrally Sponsored Scheme structure focuses on four broad areas--water security, rural infrastructure, livelihood infrastructure and climate resilience.
Assets created under the scheme will be aggregated and geo-tagged into the Viksit Bharat National Rural Infrastructure Stack and integrated with national systems such as PM Gati Shakti, helping ensure optimal utilisation and reducing the demand-supply mismatch.
On inefficiencies, SBI said that during FY25, 5.78 crore households worked under MGNREGA against a Centre release of Rs 85,334 crore, translating into an average expenditure of Rs 14,755 per household, with wide variations across states.
An analysis of 18 major states, covering 5.46 crore households, showed that if all states matched the efficiency levels of four efficient states, the same allocation could have provided employment to 6.64 crore households.
The report estimated that inefficiency, structural weaknesses and misappropriation led to the loss of employment for 1.22 crore households in a single fiscal year.
Measures such as biometric authentication, spatial technology-based planning, digital monitoring, weekly public disclosure and stronger social audits are expected to improve transparency and efficiency under the new Act.
SBI also said the Act will help boost consumption by improving wage alignment. While most states paid the notified wage rates for FY25, gaps in states such as Telangana, Rajasthan and Andhra Pradesh reduced demand for work. Better wage alignment is expected to address this issue.
The report further noted that the number of Gram Panchayats with nil expenditure fell from 39,531 in FY15 to 4,797 in FY22, but later increased to 9,280 in FY26 so far. The bottom-up approach under VB-G RAM G is expected to encourage panchayats to take up more work.
The VB-G RAM G Bill was passed during the winter session of Parliament, with approval by both Houses. President Droupadi Murmu gave her assent to the Bill on December 21, 2025, paving the way for its implementation.