&imwidth=800&imheight=600&format=webp&quality=medium "India's new rural employment act: New floor wage set at Rs 300")
The "Viksit Bharat - Guarantee for Rozgar and Ajeevika Mission, Gramin", or the VB-G RAM Act, 2025, replaces MGNREGA, the scheme that defined rural India's safety net since 2005. Under the new law, the national average wage has increased from ₹298.8 per day under MGNREGA to ₹327.4 per day. That is a rise of ₹28.6, or over 10 per cent.
More significant is the floor. Prior to the notification on Wednesday, wage rates in several states were below ₹300, with the lowest notified wage being ₹241 per day. That gap is now closed. A base wage of ₹300 per day has been fixed. Ensuring no state falls below that threshold. The wage map shows states with historically depressed rural wages get the steepest hikes, between 15 and 25 per cent. Those states include Uttar Pradesh, Bihar, Jharkhand, West Bengal, Assam, Arunachal Pradesh and Himachal Pradesh.
Also read | 9 years of GST: India's compliance phase starts
On the other end, already high-wage states have pushed further up. Haryana now pays ₹409, Goa ₹406, Kerala ₹401, and Sikkim's high-altitude panchayats ₹450. Beyond wages, the structural shift is bigger. The act guarantees up to 125 days of waged employment per household. Up from 100 days under the previous MGNREGA.
An interim allocation of ₹95,692 crore, or about $10 billion, has gone to the states to ensure a smooth transition and uninterrupted payments. The economic logic is: Pump money into the lowest rungs of the rural wage ladder, and lift consumption in regions that need it most.
The government bets the multiplier effect on demand could be substantial. From states such as UP and Bihar, with the largest rural workforce. But the rollout hasn't been friction-free.
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Opposition parties and activists have raised concerns over changes to the existing framework. Implementation will be the real test. Only 24 states have so far notified their state-level schemes, and 29 have made budgetary provisions. The formal launch happens on Thursday in Andhra Pradesh's Tirupati district.
Watch | Rural India's new wage map: who gains most
