&imwidth=800&imheight=600&format=webp&quality=medium "Union Budget 2026 allocates funds for both MGNREGA and VB-G RAM G schemes. What does this mean?")
The Union Budget 2026–27 presented by Union Finance Minister Nirmala Sitharaman on Sunday earmarked Rs 95,692 crore for the Viksit Bharat Guarantee for Rozgar and Ajeevika Mission Gramin (VB-G RAM G) scheme, and also allocated Rs 30,000 crore for the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA), which surprised some people. In the 2025-26 budget, the government had allocated Rs 86,000 crore for MGNREGA alone.
The Union government has allocated a combined ₹1,25,692 crore in the Budget for the new and existing rural jobs guarantee schemes.
Dual allocations made with focus on transition
As the VB-G RAM G scheme is set to be rolled out, the MGNREGA scheme will continue. Besides, the pending works are also to be completed, and hence dual allocations have been made for the two schemes during the transition year.
The VB-G RAM G scheme, to be notified by the Centre, will give states six months to transition from the two-decade-old MGNREGA. Till then, both schemes will continue to operate as usual, necessitating separate budgetary allocations.
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New scheme VB-G RAM G has different funding pattern
Under MGNREGA, the Union government bears 100% of the wage costs, which constitute the bulk of the expenditure, while states contribute 25% of the material costs. In contrast, under the VB-G Ram G scheme, the Centre will fund only 60% of the total cost in most states and 90% in northeastern and Himalayan states, with the state governments funding the balance.
Since the new scheme has a different funding pattern from MGNREGA, distinct allocations had to be made to ensure uninterrupted wage payments and smooth execution of ongoing works, besides giving time to states for making necessary administrative and financial changes for the transition.
A higher allocation for VB-G RAM G signals a strategic shift in rural employment policy from wage support to development and asset creation in consonance with the Viksit Bharat 2047 vision.
