States' expenditure under VB-G RAM G Act could increase six-fold
An analysis by The Hindu reveals that States' expenditure under the new Viksit Bharat-Guarantee for Rozgar and Ajeevika Mission (Gramin) (VB-G RAM G) Act, 2025, could increase nearly six-fold, from ₹7,700 crore in 2024-25 to at least ₹51,000 crore in 2026-27. This significant shift in financial burden from the Centre to States is a major concern, as the new scheme changes the funding pattern from roughly 90:10 (Centre:State) under MGNREGA to a 60:40 ratio for most categories. The Centre's interim allocation of ₹95,692.31 crore for 2026-27 does not specify State contributions or how past dues will be settled, raising concerns about financial implications for states.
Key Points
- States' expenditure under the new VB-G RAM G Act is projected to increase nearly six-fold by 2026-27.
- The new scheme shifts a significant financial burden from the Centre to the States, changing the funding pattern from 90:10 to 60:40 for most categories.
- The Centre's interim allocation for 2026-27 does not clarify State contributions or how past dues will be settled.
- The new scheme gives the Union government power to determine "normative allocation" for each State, making States fully responsible for additional expenditure.
Exam Facts
- States' expenditure under VB-G RAM G is projected to rise from ₹7,689.07 crore in 2024-25 to ₹50,968.31 crore in 2026-27.
- The funding pattern for labour wages under VB-G RAM G is a 60:40 Centre:State ratio, compared to 100% by Centre under MGNREGA.
- The number of guaranteed workdays increased from 100 under MGNREGA to 125 under VB-G RAM G.
- The Centre made an interim allocation of ₹95,692.31 crore for States for 2026-27.
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