VB-G RAM G, the scheme set to replace Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA), has received the highest share in this year’s Budget for the department of rural development, accounting for about 40 per cent of its total allocation, according to an analysis by PRS Legislative Research.The PRS analysis said VB-G RAM G has been allocated Rs 95,692 crore in the Budget, making up around 40 per cent of the Department of Rural Development’s total outlay.
Allocation pattern across key schemes
The Pradhan Mantri Awas Yojana-Gramin (PMAY-G) accounts for 23 percent of the department’s budget. This is followed by MGNREGS at 12 per cent, the National Rural Livelihood Mission (NRLM) at 8 per cent, the Pradhan Mantri Gram Sadak Yojana (PMGSY) at 8 per cent, and the National Social Assistance Program (NSAP) at 4 per cent, as per news agency PTI.In 2026–27, VB-G RAM G (40 per cent) and PMAY-G (23 per cent) together account for 63 per cent of the ministry’s total gross expenditure, followed by MGNREGS (12 per cent), NRLM (8 per cent), PMGSY (8 per cent) and NSAP (4 per cent), the report said.The ministry of rural development has been allocated Rs 1,97,023 crore in 2026–27, which is 4 per cent higher than the revised estimates for 2025–26.Within this, the department of rural development has been allocated Rs 1,94,369 crore, 4 per cent higher than the revised estimates of 2025–26. The department of land resources has been allocated Rs 2,654 crore, marking a 51 per cent increase over last year’s revised estimates.
Sharp cut in MGNREGS allocation
The allocation for MGNREGS this year stands at Rs 30,000 crore, 66 per cent lower than the revised estimate of Rs 88,000 crore last year, as per PTI.In contrast, most other schemes have seen higher allocations. PMAY-G has been allocated Rs 54,917 crore, reflecting a 66 per cent increase over the previous fiscal year’s revised estimate. PMGSY has received Rs 19,000 crore, a 73 per cent rise compared to last year’s revised estimate.
Fund-sharing pattern and fiscal implications
The report noted that under MGNREGS, wage payments accounted for around 70 per cent of total expenditure over the last five years. Material costs made up about 26 per cent of expenditure, of which roughly 20 per cent was borne by the Centre. Overall, the Center bore around 90 per cent of the total expenditure under the scheme.“With the change in fund sharing pattern under the VB-G RAM G Act, the expenditure by state governments on the scheme may increase,” the report said.Under the VB-G RAM G Act, which guarantees 125 days of work, the Center and states will share expenditure in a 60:40 ratio. For north-eastern and Himalayan states, the ratio will be 90:10, as per PTI.
Employment trends under MGNREGS
According to the analysis, over the past decade, employment under MGNREGS averaged around 48 days per household per year.Less than 10 percent of participating households completed 100 days of work. In 2020–21, average days of employment rose to 52 days per household due to the Covid-19 pandemic. Employment generation moderated thereafter, recording 50 days per household in 2024–25, reported PTI.On average, seven crore households demanded work during 2017–25, of which six crore households, around 90 per cent, were able to avail employment.The report also highlighted that actual wages paid to workers have often been lower than the notified rates. In 2025–26 (as of December 2025), wages received by workers were below the notified wage rate in 20 out of 31 states and Union Territories.For instance, in Andhra Pradesh, workers received Rs 268 against a notified Rs 307. In Chhattisgarh, workers were paid Rs 245 compared to Rs 261, and in Gujarat, Rs 264 against Rs 288.In Karnataka, workers received Rs 342 compared to the notified Rs 370. The gap was wider in Rajasthan (Rs 221 versus Rs 281) and Tamil Nadu (Rs 268 versus Rs 336), while in Telangana workers received Rs 259 against a notified Rs 307.
PMAY-G progress and challenges
Under rural housing, PMAY-G has been allocated Rs 54,917 crore, a 69 per cent increase, according to the report.However, only around 70 per cent of the targeted houses across phases have been completed so far. Delays have been attributed to issues such as land availability, migration, Covid-related disruptions and beneficiary-level constraints, the report said.
