Lok Sabha Question No. 2774 (UNSTARRED), answered on 2026-03-10
Subject: Funding Structure of VB-G RAM-G
Ministry: RURAL DEVELOPMENT
Asked by: Shri K E Prakash

## GOVERNMENT OF INDIA MINISTRY OF RURAL DEVELOPMENT

## DEPARTMENT OF RURAL DEVELOPMENT

## LOK SABHA

## UNSTARRED QUESTION NO. 2774 ANSWERED ON 10/03/2026

## FUNDING STRUCTURE OF VB-G RAM-G

## 2774. Shri K E Prakash:

Will the Minister of RURAL DEVELOPMENT be pleased to state:

- (a) whether the Government has taken note of the concerns raised by several States regarding the funding structure of the Viksit Bharat Guarantee for Rozgar and Ajeevika Mission (Gramin) (VBG  RAM-G),  which  has  replaced  the  Mahatma  Gandhi  National Rural Employment Guarantee Scheme (MGNREGS);
- (b) whether  any  pilot  study  or  pilot  implementation  of  the  said scheme was conducted prior to its nationwide rollout, if so, the details and outcomes thereof;
- (c) the issues arising from revised funding pattern and the shift from a  demand-driven  to  an  allocation-based  model,  including  its impact on effective employment days, increased fiscal burden on States, and constraints on timely wage payments; and
- (d) the steps proposed  to be taken by the Government,  in consultation with the Ministry of Rural Development, to address these issues and to review the funding structure so as to ensure adequate  Union  support,  protection  of  rural  livelihoods,  and fiscal sustainability of States?

## ANSWER

## MINISTER OF STATE IN THE MINISTRY OF RURAL DEVELOPMENT (SHRI KAMLESH PASWAN)

- (a) to (d): Regarding the concerns about Centre-State financial sharing pattern under the Viksit Bharat G RAM G Act, it is stated that,  historically,many  major  rural  employment  schemes  in  the country  have  operated  on  shared  funding  models  between  the
- Centre and the States. For example:
- I. The National Rural Employment Programme (NREP) followed a 75:25 sharing pattern.
- II. The Rural Landless Employment Guarantee Programme (RLEGP) adopted a 50:50 model.

- III. The Jawahar Rozgar Yojana (JRY) operated on an 80:20 basis.
- IV. Schemes such as SGRY, EAS, and JGSY were also implemented on  a  Centre-State  sharing  pattern,  generally  in  the  ratio  of 75:25.

Presently,  almost  all  Centrally  Sponsored  Schemes  (CSS) across  sectors  are  being  implemented  on  the  60:40  sharing model.  The  60:40  pattern  adopted  under  this  Act  is  therefore consistent  with  the  broader  framework  of  Centrally  Sponsored Schemes.

Here  it  is  also  stated  that  for  the  financial  year  2026-27,  a Central share provision of ₹95,692.31 crore has been made for the Viksit Bharat-Guarantee for Rozgar and Ajeevika Mission (Gramin) ,  representing  the  largest  allocationever,  for  rural  employment progamme at Budget Estimate Stage. With the inclusion of the corresponding estimated State share, the total programme outlay is  likely  to  exceed  ₹1.51  lakh  crore,  which  is  expected  to significantly accelerate rural transformation, large-scale employment generation and income enhancement in rural areas.

This model promotes cooperative federalism by making States active partners in rural development.

Further,  special  protective  provisions  have  been  made  for North-Eastern and Himalayan States and Union Territory (Himachal Pradesh, Uttarakhand and Jammu & Kashmir), where a 90:10 Centre-State sharing pattern applies.

In addition, the Act clearly provides that in the event of natural disasters,  pandemics,  or  other  extraordinary  circumstances, State Governments may recommend special operational relaxations to the Centre. The Central Government is empowered to allow expansion of permissible works, relaxation in documentation procedures, and temporary enhancement  of employment provisions in such situations. The framework is thus responsive, flexible, and sensitive to emerging needs.

Overall,  the  funding  pattern  is  designed  to  balance  fiscal responsibility, State participation, and national rural development priorities.

Here,  it  is  stated  that,  in  the  past  twenty  years,  Mahatma Gandhi National Rural Employment Guarantee Scheme (Mahatma

Gandhi  NREGS)  has  contributed  in  providing  guaranteed  wage-

employment to rural households ensuring wage income. However, further  strengthening  had  become  necessary  in  view  of  the significant socio-economic transformation witnessed in the rural landscape driven by widespread coverage of the social security interventions  and  saturation-oriented  implementation  of  major Government schemes. Similarly, rural connectivity, rural housing, electrification, financial inclusion and digital access have deepened,  the  workforce  has  diversified,  and  aspirations  have shifted  towards  better  incomes, growth-oriented  infrastructure, sustainable livelihoods and greater climate resilience.

Over the years, a range of administrative and technological reforms had also been introduced by the Ministry to strengthen the implementation of the Mahatma Gandhi NREGS, resulting in notable improvements in participation, transparency and digital governance.

However, deeper structural issues persisted. Monitoring in several states revealed gaps, including work not being done on the ground, expenditure not matching physical progress, the use of machines in labour-intensive work, and frequent bypassing of digital  attendance  systems.  Since  the  overall  architecture  of

Mahatma Gandhi NREGS had reached its limits, it warranted reassessment in light of evolving rural realities.

Against this backdrop and to cater to the changing aspirations, the requirement for stronger convergence was felt to establish an integrated, Whole-of-Government rural development framework covering several complementary Government schemes. Additionally, it was felt essential that rural infrastructure creation must transition from fragmented provisioning  to  a  coherent  and  future-oriented  approach  which also necessitated that resources are distributed in a fair manner to  reduce  disparities  and  promote  inclusive  growth  across  all rural areas of the country based on objective parameters.

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