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VB G RAM G: A Reimagined Rural Employment Guarantee With A Development Thrust
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Modi government’s VB G RAM G Bill replaces MGNREGA, raising job days from 100 to 125, boosting tech-driven transparency, and enhancing state flexibility amid Opposition protests.
Since FY15, the cumulative budgetary allocation to MGNREGA has reached Rs 8.64 lakh crore, about 3.6 times that of the UPA period.
As the Modi government introduced the VB G RAM G Bill — Viksit Bharat – Guarantee for Rozgar and Ajeevika Mission (Gramin) in the Lok Sabha, replacing MGNREGA, the Opposition, including the Congress, vociferously protested and tore copies of the legislation in the well of the House, irked by the absence of Mahatma Gandhi’s name. Realising its bankruptcy of issues, the Congress latched onto this matter hurriedly, without examining the fine print—where none existed. What the Congress fails to acknowledge is that rural employment schemes have existed since the 1960s, and even MGNREGA did not carry Mahatma Gandhi’s name when the Bill was legislated in 2005.
Improvements to MGNREGA since 2014-15
The implementation of MGNREGA during the UPA years was riddled with weak oversight, patchy execution, and relatively shallow budget allocations. Since FY15, the cumulative budgetary allocation to MGNREGA has reached Rs 8.64 lakh crore, about 3.6 times that of the UPA period. This includes stepped-up expenditure of Rs 1.12 lakh crore during crisis periods such as the Covid pandemic.
This exponential increase in allocation translated into visible improvements in women’s participation, person-days generated, and the creation of durable rural assets. Unlike the UPA era, digitisation and geotagging of photographs have aided in improving transparency and facilitating timely payment of wages.
However, despite the ramp-up in implementation, several irregularities and structural issues — such as fake job cards, chronic delays in wage payments, quality and durability deficits in assets, and accountability gaps — have been highlighted in various Departmentally Related Standing Committee reports.
The Bill: Differentiation across multiple dimensions
The new Bill represents a comprehensive revamp of MGNREGA while retaining the core employment guarantee. It raises the guaranteed wage employment from 100 days to 125 days per household per financial year, covering more than a third of the year. While convergence, saturation, and a whole-of-government approach existed operationally under MGNREGA, these principles have now been formally embedded in the legislation, reinforcing the commitment to rural resilience and prosperity.
The Bill also mandates that wage payments be made within seven days of completion of work, compared to the earlier ceiling of 15 days.
The most defining feature of the Bill is its emphasis on technology-enabled planning, transparency, and accountability. All Viksit Gram Panchayat Plans will be aggregated into the Viksit Bharat National Rural Infrastructure Stack and integrated with the PM Gati Shakti National Master Plan to enable spatially optimised infrastructure development. Artificial intelligence will also be leveraged for planning, audits, and fraud-risk mitigation.
Biometric authentication of workers, mobile application-based and dashboard-based monitoring systems providing real-time visibility of demand, works, workforce deployment, payments, and progress, along with weekly public disclosure mechanisms — both digital and physical — covering key metrics, muster rolls, payments, sanctions, inspections, and grievance redressal — form a robust technology-driven transparency and accountability framework.
Enhancing responsibility, predictability, flexibility, and accountability for states
Earlier, states received 32 percent devolution from central taxes. This was increased to 42 percent by the Fourteenth Finance Commission. In alignment with this shift, VB G RAM G will be implemented as a centrally sponsored scheme with a 60:40 Centre-state funding pattern, replacing the earlier central sector structure.
States will also have greater flexibility to allocate funds, based on Viksit Gram Panchayat Plans, to those gram panchayats that need them the most, thereby addressing regional disparities more effectively. The Bill introduces normative allocations, enabling states to better predict finances and plan works in advance.
With technology-driven governance and the liability resting on states to provide unemployment allowance if work is not provided within 15 days, states are firmly brought within the accountability framework. When analysed together, the employment guarantee and panchayat plans clearly reinforce the demand-driven character embedded in the Bill.
Relief for farmers and support to agriculture
Agriculture and allied activities play a critical role in food security and contribute significantly to GDP. As the annadata is a key stakeholder in the vision of Viksit Bharat, farmer welfare remains a core focus of the Modi government. Initiatives such as PM-KISAN, PMFBY, the announcement of 50 percent returns over cost in MSP, and GST 2.0 reforms, including a reduction in GST on key farm inputs to five percent, reflect this commitment.
Yet, persistent challenges remain in agricultural production, with implications for food security. One major issue is the chronic labour shortage during peak sowing and harvesting periods. This concern was also flagged by the Standing Committee on Rural Development in its 2012–13 report on MGNREGA, which noted that MGNREGA works during peak agricultural seasons adversely affect labour availability for farming. While the department acknowledged the issue, it had earlier rejected a blanket ban on works during peak periods.
Recognising this challenge, and considering that over 80 percent of farmers are small and marginal, farm mechanisation levels remain low, and more than 45 percent of the cost of cultivation is labour-related, the Bill empowers states to notify, in advance, a period aggregating up to 60 days in a financial year covering peak sowing and harvesting seasons during which works under the scheme will not be undertaken. This ensures adequate availability of farm labour during critical agricultural operations.
Another major concern is that over 50 percent of India’s net sown area remains monsoon-dependent, exposing food production to high rainfall variability. With water security identified as one of the four thematic focus areas, water-related works such as irrigation support and groundwater recharge will strengthen agricultural resilience. The other thematic focus areas—connectivity, storage, and protection from extreme weather—also provide direct and indirect support to farmers.
Conclusion
The transformative VB G RAM G Bill represents continuity rather than rupture, carrying forward the spirit embedded in MGNREGA while addressing its structural shortcomings. By raising the employment guarantee from 100 to 125 days, strengthening execution through technology-enabled planning, payments, and oversight, and enhancing state participation and accountability, the Bill seeks to elevate rural employment guarantees to the next level.
In doing so, states are also poised to reap positive spillover effects across agriculture and rural infrastructure, making VB G RAM G a more holistic instrument for rural development in a Viksit Bharat.
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December 20, 2025, 07:32 IST
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A hallmark of President Trump’s second term has been his penchant for negotiating economic deals with countries that pledge to invest trillions of dollars in the United States
“It’s now pouring in from all parts of the world,” Mr. Trump said during a speech last fall in which he boasted of nearly $20 trillion of foreign investment.
The meetings this week between Mr. Trump and China’s leader, Xi Jinping, in Beijing are expected to include talks over purchases of American farm products and planes and the possibility of expanding access for American companies into China’s vast consumer market.
There has also been speculation that Mr. Trump and his advisers are seeking a major investment from China. But such a pledge could be complicated by deep distrust in the United States toward Chinese firms, which many workers blame for the hollowing out of American manufacturing.
Treasury Secretary Scott Bessent acknowledged the challenge in an interview on CNBC on Thursday, explaining that the United States and China were working to develop an investment board that would determine what sectors were acceptable for Chinese investment. That would essentially provide China with guidance on how to invest in the United States without its transactions being blocked by the Committee on Foreign Investment, an interagency group that reviews foreign investment and is led by Mr. Bessent.
“Look, there are plenty of things that the Chinese could invest in in the U.S.,” said Mr. Bessent, who is in Beijing with Mr. Trump.
Chinese investment in the United States has declined sharply in recent years amid tougher investment screening standards nationally and at the state level.
That sentiment could ultimately clash with Mr. Trump’s transactional instincts and his desire to return home with a big-ticket win.
“If Trump were to be committed to a major investment deal with China, there’s still a challenge of implementation,” said Kyle Jaros, an expert on U.S.-China ties at the University of Notre Dame. “It would take real follow-through to overcome a lot of the political and regulatory barriers that are in place right now.”
According to a report published last month by the research firm Rhodium Group, less than $3 billion of Chinese investment in the United States was announced in 2025. That was the lowest on record, with investment peaking at around $45 billion in 2016.
The United States has imposed tight restrictions on Chinese investment out of national security concerns, making it difficult for Chinese firms to build factories near military facilities. Some states also have enacted restrictions on Chinese purchases of real estate and farmland.
China’s clean energy technology, such as electric vehicles and batteries, has also faced challenges in the United States because of political backlash. There was a surge of Chinese investment in those sectors after clean energy and tax legislation was passed under the Biden administration in 2022, but according to Rhodium, more than half of those investments have been canceled, paused or delayed.
A $2.4 billion electric vehicle battery factory that the Chinese company Gotion was building in Michigan was canceled last year after the community there protested and mounted legal challenges to stop the project.
Other types of Chinese investment have also stirred controversy. That includes the recent purchase by Nongfu Spring, a Chinese bottled water company, of a warehouse in New Hampshire that it wants to turn into a bottling facility. The purchase was reviewed last year by the state’s attorney general.
After the inquiry found that there was no wrongdoing associated with the transaction, Gov. Kelly Ayotte of New Hampshire issued executive orders to block China, Russia and Iran from getting access to data or purchasing land or property in the state. “Foreign adversaries like China should not be doing business in New Hampshire,” said Ms. Ayotte, a Republican.
There continues to be deep skepticism within the U.S. automobile industry about competition from China. Last month, a group of American steel associations sent a letter to top Trump administration officials urging them to keep Chinese car manufacturers out of the United States.
“As representatives of our nation’s manufacturing sector, we urge you to ensure American competitiveness by not surrendering access to the U.S. auto market to the Chinese Communist Party,” they wrote. “Additionally, allowing Chinese companies and Chinese autos into the U.S. would create consequential, unacceptable national security risks.”
Agriculture also remains a contentious issue. The chairman of the House select committee on China, Representative John Moolenaar, a Republican from Michigan, introduced new legislation this month that would ban China from acquiring U.S. farmland.
“Food security is national security, and we cannot allow foreign adversaries like China to buy up American farmland near our most sensitive military and critical infrastructure sites,” Mr. Moolenaar said.
The bipartisan bill would create a requirement for the federal government to review Chinese deals involving ports and telecommunications infrastructure. It would also apply to purchases made by investors from Russia, Iran and North Korea
Michael Pillsbury, a China scholar who has served as an outside adviser to the Trump administration, said that the president’s advisers were concerned about Chinese investments in sensitive sectors such as semiconductors, artificial intelligence, biotechnology, aerospace and critical minerals. It has been a challenge, he said, to come up with a “white list” of sectors that could be considered safe.
“The red lines have moved back and forth as the nature of technology has changed,” Mr. Pillsbury said.
He added that while Mr. Trump is eager to announce a $1 trillion Chinese investment pledge, he is mindful not to incite political backlash.
“I think there’s been an effort by the administration to avoid getting into a fight with the China hawks,” Mr. Pillsbury added.
Ahead of Mr. Trump’s trip to China, a White House official downplayed the idea that the administration was seeking to create a new $1 trillion Chinese investment program. The White House continues to be focused on pushing China to increase its purchases of American farm goods, which it boycotted for much of last year when trade tensions flared.
Despite the anticipation of a Chinese investment pledge, the details and follow-through will be important.
While Mr. Trump has said that foreign investments have topped $20 trillion, according to the White House’s own investment tracker, U.S. and foreign investment pledges made during Mr. Trump’s second term total $10.6 trillion. Foreign leaders appear to have learned that they can win favor with Mr. Trump by promising whopping investment pledges that they might not fulfill.
“The devil is in the details,” said Philip Ludvigson, a partner in King & Spalding who specializes in national security risks and foreign investment, “about not only where the investment goes but also whether it happens at all.”
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