MGNREGA Effectively Stalled as VB-GRAMG Transition Creates Rural Employment Void

Rural employment under MGNREGA has effectively ground to a halt since April 2026 as local officials await central guidelines for the replacement Viksit Bharat-Guarantee for Rozgar and Ajeevika Mission Gramin programme that has not yet been formally launched, leaving returning migrant workers displaced by the LPG crisis without a rural employment safety net. Only 9.5 million persondays were generated in the first half of April 2026, equivalent to just 4 per cent of April 2025 levels.

The central government replaced MGNREGA with the VB-GRAMG Act 2025 with an expected rollout from FY2026-27, but no central government guidelines have been issued to implement the new programme. The NREGA Sangharsh Morcha analysis finds that officials on the ground are refusing to accept work applications citing lack of instructions, while also stating they have been directed not to initiate new works under MGNREGA. Where worker pressure has led to applications being accepted in some Karnataka, Rajasthan and Uttar Pradesh districts, no new worksites have been opened, with only a handful of workers absorbed into old works sanctioned before February.

Wage payments have effectively ceased across all states since 21 January 2026, with approximately Rs 10,000 crore of wages pending. The revised cost-sharing ratio of 60:40 under VB-GRAMG requires states to bear 40 per cent of all costs, adding fiscal uncertainty at state level. Revised MGNREGA wage rates for the new financial year have not been notified, the first such failure in over ten years. In West Bengal, no MGNREGA implementation has occurred since December 2021 despite a Calcutta High Court ruling in June 2025 ordering resumption. Digital attendance systems requiring biometric verification are creating additional barriers, with attendance failures documented at worksites.

The situation is particularly acute because the LPG crisis triggered by the Hormuz disruption has accelerated the return of millions of migrant workers to villages who would normally depend on MGNREGA for off-season employment. MGNREGS workers and activists have called for a mass strike on 15 May to demand immediate rollback of the VB-GRAMG Act, restoration of strengthened MGNREGS with 200 guaranteed days per household at a minimum Rs 700 per day wage indexed to inflation, Gram Sabha control over planning and implementation, and withdrawal of the exclusionary biometric attendance system.

Key figure — Rs 10,000 crore in wages pending across all states since January 2026