Union Budget 2026: The Rise of VB-G RAM G and the Debate Over Rural Job Security

The Union Budget 2026 has introduced a massive shift in how India handles rural employment. On February 1, 2026, Finance Minister Nirmala Sitharaman unveiled the Viksit Bharat-Guarantee for Rozgar and Ajeevika Mission (Gramin), or VB-G RAM G. This new scheme is set to replace the long-standing MGNREGA, which has been the backbone of rural job security for two decades. The government has put forward a central allocation of ₹95,692.31 crore for this mission. While the number sounds huge, it has quickly become a point of heated discussion among economists and social activists.

​The core promise of VB-G RAM G is to provide 125 days of guaranteed work per year to rural households. This is a significant jump from the 100-day guarantee offered by the old MGNREGA system. However, the excitement over more work days is being met with a reality check regarding the actual money on the table. Experts are raising red flags, suggesting that the current funding might not be enough to actually deliver on such an ambitious promise.

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Understanding the New VB-G RAM G Scheme

​VB-G RAM G isn't just a name change; it represents a fundamental overhaul of how rural jobs are funded and managed. Unlike MGNREGA, where the Centre paid for all unskilled wages, the new scheme follows a 60:40 cost-sharing model. This means the Central Government pays 60% of the costs, while the State Governments are expected to pitch in the remaining 40%.

​The government believes this will make states more responsible and involved in creating productive assets. The scheme focuses on four main areas: water security, rural roads, livelihood infrastructure, and fighting extreme weather events. By linking jobs to these sectors, the aim is to build "self-reliant villages" that can eventually thrive without constant government aid.

​Why Experts Are Concerned About the Numbers

​The big question everyone is asking is whether ₹95,692 crore is actually enough. On paper, when you combine this with the ₹30,000 crore set aside for the transition of MGNREGA, the total for rural jobs hits over ₹1.25 lakh crore. That is a 43% increase compared to last year. But here is where the math gets tricky.

​Experts and researchers from groups like LibTech India have done their own calculations. They point out that there are roughly 8.65 crore active job card holders in India. If the government truly wants to give all of them 125 days of work at an average daily wage of about ₹355, the total cost would be astronomical. To meet that 125-day promise for everyone, the Central share alone would likely need to be around ₹2.30 lakh crore.

​By providing less than half of that amount, critics argue that the government might end up rationing work. If the funds run out mid-year, the "guarantee" of 125 days could become more of a target than a reality.

​The Burden on State Governments

​One of the biggest shifts in Budget 2026 is the new financial burden on states. Under the old system, states only had to worry about a portion of material costs. Now, they have to find the money for 40% of everything, including wages. For many states already struggling with high debt, this is a tall order.

​There is a real fear that poorer states, which have the highest demand for rural manual labor, will be the ones least able to afford their 40% share. If a state cannot provide its portion of the funding, the project stops, and the workers lose their income. This creates a risk where the "Viksit Bharat" vision moves at different speeds depending on how wealthy a state's treasury is.

​Technology and Transparency in the New Era

​To make the most of the allocated funds, the government is leaning heavily on technology. The VB-G RAM G Act mandates the use of biometric authentication and geospatial planning. The idea is to reduce "ghost workers" and ensure that every rupee spent actually results in a physical asset like a pond, a road, or a community center.

​Real-time digital dashboards will track payments and progress. While this transparency is welcome, it also brings challenges. In remote rural areas where internet connectivity is spotty, high-tech requirements have sometimes led to delays in wage payments in the past. Moving forward, the success of this ₹95,692 crore allocation will depend largely on whether the digital infrastructure can keep up with the physical work.

​What Happens to MGNREGA?

​For those worried about an abrupt end to the old system, the government has planned a transition period. For the first six months of the 2026-27 fiscal year, MGNREGA will continue to run alongside VB-G RAM G. The ₹30,000 crore earmarked for MGNREGA is intended to clear old debts and finish projects that are already underway.

​This "sequenced replacement" is meant to prevent a total collapse of rural livelihoods during the switch. However, once that transition period ends, the legal framework of MGNREGA will be fully replaced by the new Act. The safety net that millions of Indians relied on for two decades is officially changing shape.

​Looking Ahead: Will It Be Enough?

​The Union Budget 2026 has set a very high bar for rural development. By promising 25 extra days of work, the government has sent a message of hope to rural India. But as the saying goes, the devil is in the details—or in this case, the decimal points.

​If the government’s hope is that the states and the new shared-funding model will fill the gap, we will see a massive transformation of the Indian countryside. But if the experts are right and the funding falls short, the coming year could see a lot of "work demanded" but not enough "work provided." For now, all eyes are on how the first phase of VB-G RAM G rolls out on the ground.