VB–G RAM G Act: Centre Sets ₹300 Daily Floor Wage, 125-Day Job Guarantee from July 1
The Centre's revised wage framework under the VB–G RAM G Act raises the national average rural wage to ₹327.4/day, extends guaranteed employment to 125 days, and backs rollout with a ₹95,692.31 crore interim allocation.
The short answer
The Government of India has notified a new minimum daily wage of ₹300 under the VB–G RAM G Act, 2025, effective July 1, 2026, replacing the previous MGNREGA framework. The national average notified wage rises from ₹298.8 to ₹327.4 per day — an increase of over 10 percent — while guaranteed rural employment expands from 100 to 125 days per eligible household annually. An interim allocation of ₹95,692.31 crore has been made to States and Union Territories to support seamless rollout from day one.
The new law
VB–G RAM G Replaces MGNREGA with a Broader Guarantee
The Viksit Bharat – Guarantee for Rozgar and Ajeevika Mission (Gramin) Act, 2025, comes into force on July 1, 2026, supplanting the earlier rural employment legislation. The most consequential structural change is the extension of guaranteed wage employment from 100 days to 125 days per eligible rural household each year — a 25-percent increase in the entitlement that directly expands the income floor for the rural poor.
Alongside the extended guarantee, the Act introduces an interim minimum daily wage of ₹300, ensuring that no enrolled worker in any State or Union Territory receives a daily rate below that threshold. The government says the new wage structure has been computed using a methodology that combines annual indexation with the newly established base wage, with the explicit aim of narrowing the longstanding wage gap between lower- and higher-paying states.
The numbers
National Average Wage Climbs 10% to ₹327.4 per Day
According to the Ministry of Rural Development, the national average notified wage has moved from ₹298.8 per day under the previous MGNREGA framework to ₹327.4 per day under VB–G RAM G — an absolute gain of ₹28.6 per day, or more than 10 percent nationwide.
The revision covers all 34 States, Union Territories and wage regions. Of these, 21 administrative units where previous wages fell below ₹300 have been brought up to the new base level. At the upper end of the spectrum:
- Sikkim (high-altitude Gram Panchayats): ₹450/day
- Haryana: ₹409/day
- Goa: ₹406/day
- Kerala: ₹401/day
All four now post daily rates exceeding ₹400, reflecting both the indexation formula and their comparatively stronger existing wage base.
The highest increases have been provided to states that historically had lower wage rates so that workers in those regions receive greater support.
Regional focus
North-East and Low-Wage States See Steepest Revisions
Union Minister Shivraj Singh Chouhan stated that the highest increases have deliberately been directed at states that historically reported lower wage rates, so that workers in those regions receive greater support. The ministry's notification identifies Arunachal Pradesh and Nagaland as the biggest beneficiaries, with wages rising by nearly 24.5 percent.
Significant upward revisions have also been announced for a cluster of states that have long lagged in rural wage levels:
- Eastern India: Uttar Pradesh, Bihar, Jharkhand, West Bengal, Odisha
- Central India: Chhattisgarh, Madhya Pradesh
- North-East: Assam, Tripura
- Hills: Uttarakhand
The concentration of the largest increases in these states suggests the revised methodology is functioning as intended — compressing the disparity between the lowest- and highest-paying regions, even as every state receives some degree of upward revision.
The fiscal backstop
₹95,692.31 Crore Interim Allocation Anchors Rollout
To underpin a smooth transition to the new framework from its very first day, the Centre has sanctioned an interim allocation of ₹95,692.31 crore to States and Union Territories. The government has stated that this fund is designed to guarantee uninterrupted programme implementation, ensure timely wage disbursements and prevent any disruption during the changeover from the previous employment scheme.
The ministry indicated that the Act is expected to simultaneously strengthen rural incomes, enhance livelihood security and support the creation of durable rural assets — a combination that positions the programme as both a social safety net and a rural infrastructure driver. Whether the allocation proves sufficient through the full financial year will depend on actual enrolment rates and the pace of asset-creation work across states.
Why it matters
For rural households across India, the shift to a ₹300 floor wage and 125-day guarantee represents a meaningful step up in income security, particularly in historically low-wage states such as Bihar, Jharkhand, Uttar Pradesh and the North-East. The ₹95,692.31 crore interim allocation signals the Centre's intent to avoid the payment delays that have dogged rural employment programmes in the past. Traders and agri-businesses serving rural markets should watch for a modest uptick in discretionary rural spending as higher and more timely wages feed through to consumption. Policymakers will want to track whether the transparent indexation-plus-base-wage formula effectively narrows the persistent wage gap between states over successive annual revisions.
Frequently asked
- What is the VB–G RAM G Act and how does it differ from MGNREGA?
- The Viksit Bharat – Guarantee for Rozgar and Ajeevika Mission (Gramin) Act, 2025, replaces the earlier rural employment framework. Its two key upgrades are an extension of guaranteed wage employment from 100 days to 125 days annually per eligible rural household, and the introduction of a minimum daily wage floor of ₹300.
- By how much have rural wages increased under the new Act?
- The national average notified wage has risen from ₹298.8 per day under MGNREGA to ₹327.4 per day under VB–G RAM G — an increase of ₹28.6 per day, or more than 10 percent. Arunachal Pradesh and Nagaland recorded the steepest rise at nearly 24.5 percent.
- Which states will benefit the most from the revised wage rates?
- The 21 states and union territories where wages were previously below ₹300 have been brought up to the new base level. The largest percentage increases go to Arunachal Pradesh and Nagaland (nearly 24.5%), with significant revisions also announced for Uttar Pradesh, Bihar, Jharkhand, West Bengal, Odisha, Chhattisgarh, Madhya Pradesh, Assam, Tripura and Uttarakhand.
- How much has the Centre allocated to implement the VB–G RAM G Act?
- The Centre has made an interim allocation of ₹95,692.31 crore to States and Union Territories. The government says this is intended to ensure uninterrupted programme delivery, timely wage payments and a smooth transition from the first day of the Act's rollout on July 1, 2026.
Source
This report summarises and analyses coverage from Rural Voice — Latest. The analysis and India context are IndianAgri's own.