Parliament has approved the Viksit Bharat – Guarantee for Rozgar and Ajeevika Mission (Gramin) [VB-G RAM (Gramin)], replacing the earlier demand-driven framework of MGNREGA with a new implementation model. The scheme increases the minimum employment guarantee from 100 days to 125 days, while introducing a 60:40 Centre–State funding pattern, thereby increasing the fiscal responsibility of State Governments. According to an analysis, fiscally weaker States such as Bihar, Chhattisgarh and Jharkhand are likely to experience the highest fiscal stress under the revised financing framework.
The newly approved Viksit Bharat – Guarantee for Rozgar and Ajeevika Mission (Gramin) represents a significant structural reform in India's rural employment architecture. While the programme expands employment support by increasing the guaranteed work period to 125 days, it simultaneously shifts a larger share of financing responsibility to State Governments through a 60:40 Centre–State cost-sharing arrangement.The revised funding mechanism is expected to improve State participation in programme implementation but also places greater fiscal pressure on States with relatively weaker revenue bases and higher fiscal deficits. Unlike financially stronger States, poorer States may find it difficult to mobilise additional resources without affecting expenditure priorities.Among all States, Bihar is projected to face the highest fiscal burden. Based on recent Central allocations, Bihar may need to contribute approximately ₹2,576 crore, equivalent to around 0.23% of its Gross State Domestic Product (GSDP). The challenge becomes more significant because Bihar already recorded a fiscal deficit of around 9.2% of GSDP in FY2024–25, substantially above the national average, leaving relatively limited fiscal space for additional commitments.Similarly, Chhattisgarh is expected to incur an additional expenditure of approximately ₹1,289 crore, representing nearly 0.20% of its GSDP. The State already maintains a comparatively high fiscal deficit and has undertaken several welfare commitments, increasing pressure on public finances.Jharkhand also emerges among the most vulnerable States. The additional expenditure is estimated at approximately ₹1,113 crore, equivalent to nearly 0.20% of GSDP, besides accounting for nearly 3–5% of its own tax revenue, indicating relatively higher fiscal stress due to limited internal revenue mobilisation.The revised financing arrangement is also expected to influence State budget priorities. Rural development allocations may increase across most States to accommodate the new funding requirements. However, States with limited fiscal capacity may have to either reduce expenditure elsewhere or increase borrowings.The analysis also highlights varying impacts across States. Tamil Nadu, despite stronger finances, may need to allocate nearly ₹4,000 crore, equivalent to almost 30% of its existing rural development budget, making the adjustment significant from a sectoral budgeting perspective. In Kerala and Andhra Pradesh, additional expenditure under the scheme could reduce fiscal space for capital expenditure, as the required allocation exceeds 7.5% of annual capital outlay if financed through expenditure compression.On the other hand, wealthier States such as Gujarat, Haryana and Maharashtra are expected to experience relatively limited macroeconomic impact, with the additional burden remaining below 0.05% of GSDP because of their stronger revenue capacity and larger State economies.Overall, the new scheme seeks to strengthen rural livelihoods by providing longer employment guarantees. However, successful implementation will depend upon the fiscal capacity of States, Centre–State financial coordination, and effective budget management.
| Feature | Provision |
|---|---|
| Scheme | Viksit Bharat – Guarantee for Rozgar and Ajeevika Mission (Gramin) |
| Nature | Rural Employment Guarantee Programme |
| Employment Guarantee | 125 Days |
| Previous Guarantee | 100 Days (MGNREGA) |
| Funding Pattern | 60 : 40 (Centre : State) |
| Objective | Rural employment and livelihood security |
| State | Estimated State Share | Approx. % of GSDP |
|---|---|---|
| Bihar | ₹2,576 crore | 0.23% |
| Chhattisgarh | ₹1,289 crore | 0.20% |
| Jharkhand | ₹1,113 crore | 0.20% |
| Uttar Pradesh | ₹4,029 crore | 0.13% |
| Tamil Nadu | ₹3,993 crore | 0.11% |
The new framework may:
However, it may also:
Gross State Domestic Product (GSDP) is the total monetary value of all final goods and services produced within a State during a financial year.
Fiscal Deficit is the difference between total government expenditure and total receipts excluding borrowings.
Fiscal Deficit = Total Expenditure − (Revenue Receipts + Non-Debt Capital Receipts)
Updated – 19 December 2025 | 12:10 PMNews Source: