India's new rural jobs Act raises the guarantee to 125 days and caps what each state may spend

The Act that replaces India's rural job guarantee is on the statute book as Act No. 36 of 2025, and its own text records that the President assented on 20 December 2025. That is a day earlier than the date in wide circulation. The government broadcaster Akashvani News reported the assent on 21 December 2025 without naming an assent date, and the 21st is the date the Ministry of Law and Justice published the Act in the gazette, alongside the Saka date Agrahayana 30, 1947. The signature came first, the publication second.

The headline change is more days. The long title of the Viksit Bharat, Guarantee for Rozgar and Ajeevika Mission (Gramin), or VB-G RAM G, Act, 2025 promises a statutory guarantee of one hundred and twenty-five days of wage employment, up from the hundred days under the Mahatma Gandhi National Rural Employment Guarantee Act, 2005. The Act repeals MGNREGA and the rules made under it from an appointed date, while saving notifications issued, schemes sanctioned and proceedings begun under the repealed Act.

The mechanism change is larger, and runs the other way. Under section 4, the central government "shall determine the State-wise normative allocation for each financial year, based on objective parameters as may be prescribed", and any expenditure a state incurs in excess of its normative allocation "shall be borne by the State Government". The same pairing is repeated later in the Act. The cost sharing ratio is set at 90:10 between the central government and the state governments for the North Eastern States, the Himalayan States and the Union Territory grouping of Uttarakhand, Himachal Pradesh and Jammu and Kashmir, and 60:40 for all other states and union territories with a legislature. Under MGNREGA the centre carried the wage bill.

Put plainly, the guarantee remains a legal entitlement of the household while the money becomes a budgeted allocation of the state. A state that exhausts its normative allocation does not stop owing the guarantee; it owes the guarantee out of its own funds. The Act also keeps the liability for unemployment allowance and for delay compensation with the state government, which was already the position under the old law.

Outlook Business reported on 19 December 2025, the day after passage, that the allocation is capped near 95,000 crore rupees. That figure does not appear in the text of the Act, which sets out the allocation method rather than a number, so it should be read as reported budget intent rather than statutory ceiling. The same report put the fiscal impact on Bihar at 2,576 crore rupees, or 0.23 per cent of gross state domestic product, with Uttar Pradesh at about 0.13 per cent and Gujarat, Haryana and Maharashtra at roughly 0.05 per cent each. It also reported that only about 9.5 per cent of MGNREGA workers ever completed the full hundred days, and that over two years about 7 per cent of households received their full quota. If those proportions hold, the move from 100 to 125 days changes the ceiling for a small minority and the funding rule for everyone.

There is a second restriction with no MGNREGA equivalent. Section 6 requires that no work be commenced or executed under the Act for a period the state declares, of up to sixty days in a financial year, covering the peak agricultural seasons of sowing and harvesting, so that farm labour remains available. States may vary the window by agro-climatic zone and local patterns of agricultural activity.

The Act builds a good deal of new machinery. It constitutes a National Level Steering Committee whose functions include recommending decisions on normative allocations to states, and a State Level Steering Committee, alongside the retained Gramin Rozgar Guarantee Councils. Works are directed at four areas, described by PRS Legislative Research as water security, rural infrastructure, livelihood infrastructure and mitigation of extreme weather events, with projects classified into Category A, Category B and Category C under Schedule I. PRS also records biometric authentication, geospatial planning, mobile dashboards and weekly public disclosures, and integration with the PM Gati Shakti National Master Plan.

The parliamentary passage was quick. PRS records introduction in the Lok Sabha on 16 December 2025 and passage by both Houses on 18 December 2025. Outlook Business reported that the Congress MP Priyanka Gandhi Vadra raised unpaid wages and the added burden on states.

One important thing is unresolved. Section 1 provides that the Act "shall come into force on such date as the Central Government may, by notification, appoint". The Act itself names no commencement date, and no commencement notification was located for this report, so the widely repeated start of 1 July 2026 could not be confirmed against a published instrument. Nor are the "objective parameters" for normative allocation published: they are left to rules the central government has yet to make, which means the number that decides how much work each state can afford has not been shown to anyone.