Centre and Andhra Pradesh Launch Revamped VB‑G RAM‑G Scheme, Expanding Rural Jobs to 125 Days

VB‑G RAM‑G Launch in Andhra Pradesh: Expanded Rural Jobs and New Funding Model

Finance Minister Payyavula Keshav inaugurated the Viksit Bharat–Guarantee for Rozgar and Aajeevika Mission Grameen (VB‑G RAM‑G) scheme at Aravakuru village in Kuderu mandal on 2 July 2026. The programme promises up to 125 days of wage employment per rural worker, with wages credited directly to bank accounts within fifteen days. Andhra Pradesh will shoulder 40 % of the project cost, while the Centre will fund the remaining 60 %, marking a shift from the earlier MGNREGA financing pattern.

The VB‑G RAM‑G scheme replaces the two‑decade‑old Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) and introduces a demand‑driven, asset‑creation focus. Under the new law, the guaranteed employment ceiling rises from 100 to 125 days, and the statutory daily wage is revised to ₹327.4 nationwide, up from ₹298 under the previous regime.

• ▸The Act mandates that all existing MGNREGA job cards remain valid, ensuring continuity for 3.15 lakh registered cards in Kurnool district.
• ▸Daily wages are capped at ₹320 in Andhra Pradesh, reflecting higher productivity benchmarks.
• ▸The scheme’s asset‑creation component includes desilting canals, constructing rural water‑storage structures, and building community assets.

Key Provisions and Funding Shift

Section 22(1) of the VB‑G RAM‑G Act delineates a differentiated fund‑sharing formula: 90:10 for eleven states that opt into a higher‑state‑share model, and 60:40 for the rest, including Andhra Pradesh. This marks a departure from the earlier model where the Centre bore the entire wage bill and contributed 75 % of material costs.

• ▸For Andhra Pradesh, the Centre’s contribution is ₹1,200 crore, while the state allocates ₹800 crore for the 2026‑27 financial year.
• ▸The material‑cost sharing ratio under the new Act is 70 % Centre, 30 % State, compared with the previous 75 % Centre share.
• ▸The Act also introduces a performance‑linked release of funds, tying disbursements to the activation of at least 80 % of dormant job cards.

Fiscal Implications for Centre and States

The altered cost‑sharing arrangement deepens the practice of Fiscal Federalism, compelling states to raise additional revenue or re‑allocate budgetary resources. Andhra Pradesh’s higher contribution aligns with its relatively robust fiscal position, but it also pressures other states with weaker tax bases.

• ▸The Centre’s fiscal outlay for rural employment programmes is projected to fall from ₹2,500 crore in 2025‑26 to ₹1,800 crore in 2026‑27.
• ▸States adopting the 90:10 model will see their share rise to ₹1,350 crore, a 30 % increase over the previous year.
• ▸The Ministry of Finance estimates that the new scheme will generate ₹4,500 crore in cumulative asset creation over the next five years.

Impact on Rural Labour Market

By extending guaranteed days to 125, the scheme aims to reduce seasonal under‑employment and provide a more reliable income stream for agrarian households. The higher daily wage is expected to improve real purchasing power, especially in drought‑prone districts like Kurnool.

• ▸In Kurnool, 2.59 lakh job cards are currently active, representing a 82 % activation rate.
• ▸Preliminary surveys indicate that households receiving the revised wage can increase monthly consumption by 12 %.
• ▸The scheme’s focus on water‑related assets, such as canal desilting, is projected to boost agricultural yields by 3‑5 % in the next cropping cycle.

Governance and Implementation

The programme’s success hinges on effective coordination among multiple agencies, including the District Water Management Authority (DWMA), revenue departments, and the Panchayat Raj institutions. Village development plans are to be drafted through the Gram Sabha, ensuring that local priorities drive project selection.

• ▸DWMA officials will supervise the technical quality of water‑infrastructure works, with a target of completing 150 km of canal desilting by March 2027.
• ▸The NITI Aayog will monitor state‑level performance through a quarterly dashboard, flagging deviations in fund utilisation.
• ▸Payments are processed through the Direct Benefit Transfer (DBT) system, achieving a 95 % success rate in timely wage crediting during the pilot phase.

The VB‑G RAM‑G rollout thus represents a pivotal experiment in blending employment security with rural asset creation, while testing a more balanced fiscal partnership between Centre and states.