Revamped MGNREGA Scheme VB-G RAM G Expected to Get Record Allocation in 2026 Budget

The Ministry of Rural Development, which manages one of the key centrally sponsored schemes of the central government, the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA), received an outlay of ₹1,90,406 crore in the Union Budget 2025–26. Now, a report claims its allocation might be further increased.

This comes in the backdrop of the Prime Minister Narendra Modi-led government renaming the scheme as the Viksit Bharat–Guarantee for Rozgar and Ajeevika Mission (Gramin) (VB-G RAM G) in December last year. The government has also changed the statutory framework of the scheme, guaranteeing 125 days of wage employment per rural household and shifting its funding model to normative funding from the earlier demand-based funding.

Before the Bill to change the scheme was introduced, Moneycontrol reported that in FY27, the government may allocate more than ₹90,000 crore for MGNREGA, the highest-ever budget estimate (BE).

Citing officials, the report said household construction under the Pradhan Mantri Awas Yojana–Gramin and projects for water conservation and water harvesting are priorities for the government, which would require additional expenditure under the job-guarantee scheme.

In FY25, the Budget allocated ₹85,640 crore for the scheme, which guaranteed 100 days of employment in a financial year.

However, as per a PIB release dated December 22, the total estimated annual requirement of funds for wage, material and administrative components is ₹1,51,282 crore, including the State share. Of this, the estimated Central share is ₹95,692.31 crore.

The new VB-G RAM G Act establishes a clear and well-defined system to ensure the Mission is implemented in a coordinated, transparent and accountable manner from the national level down to villages. Central and State Gramin Rozgar Guarantee Councils will guide policy and review progress, while National and State Steering Committees will provide strategic direction and monitor performance.

Panchayati Raj Institutions will play a key role in planning and execution, with Gram Panchayats responsible for implementing at least half of the works by cost. At the district and block levels, Programme Coordinators and Programme Officers will manage planning, payments, compliance and social audits, while Gram Sabhas will have a stronger role in conducting social audits and accessing all records to ensure transparency.

The VB-G RAM G Act prioritises water-related works to support agriculture and groundwater recharge, alongside investments in rural infrastructure such as roads and connectivity to improve access to markets.

Other than the rural job guarantee programme, the Ministry of Rural Development also runs several other schemes through its two departments, the Department of Rural Development and the Department of Land Resources.

In Budget 2025–26, the Ministry of Rural Development was allocated ₹1,90,406 crore. Of this, the Department of Rural Development received ₹1,87,755 crore, an increase of 8% over the revised estimates for the financial year 2024–25. The Department of Land Resources was allocated ₹2,651 crore, which is 35% higher than last year’s revised estimate.

In the Budget speech for 2025–26, the government announced a Rural Prosperity and Resilience programme to create opportunities in rural areas through skilling, technology and investment, with a focus on women, youth, farmers and landless families. Public sector banks were also asked to develop a Grameen Credit Score framework to improve access to credit for self-help group members and rural households.