G RAM G Bill Diminishes Job Guarantee: Centralisation Tramples Federalism
States would be terrible losers if they operate the G RAM G Bill guarantee as subordinate authorities of the Centre.
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The Narendra Modi government got the oddly named Viksit Bharat—Guarantee for Rozgar and Ajeevika Mission (Gramin) Act, 2025, or VB—G RAM G Bill, hustled through the Parliament to replace the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA). The primary rationale for the Bill, and the crude cocktail of names it has come up with, is to somehow give the jobs guarantee law a religious and Hindi colour.
The G RAM G Bill, otherwise, disturbs India’s fiscal federalism and constitutional scheme of things. It raises several questions.
What does G RAM G Bill have to do with Viksit Bharat? Why is Ajeevika Mission (Gramin) in its name?
What is the extent of employment guarantee dilution or is it effectively disbanded? What are implications of the Central government walking away from funding guarantee expenditure and shifting it to the states?
What does centralisation of all authority in the Central government and transfer of all responsibility to the states mean for India’s federal polity? Is the Bill unconstitutional?
Nothing to Do With Viksit Bharat or Ajeevika Mission
G RAM G Bill mandates the states to compulsorily notify it as “Viksit Bharat—Guarantee for Rozgar and Ajeevika Mission (Gramin): VB—G RAM G—(विकसित भारत—जी राम जी) Scheme” and use the same nomenclature in all documents.
The full name sounds inelegant and may not be understood in non-Hindi states. Inclusion of expressions "Viksit Bharat" and "Ajeevika Mission (Gramin)" would create enormous confusion.
None understands what Viksit Bharat is. The commitment to provide Viksit Bharat roadmap is crawling at snail’s pace in NITI Aayog for years and may not see the light of the day anytime soon. G RAM G Bill only offers poverty-line wage-income for only three to four months to unskilled workers.
This cannot be the notion and vision of Viksit Bharat.
The G RAM G Bill has nothing to do with Ajeevika Mission, a separate Centrally Sponsored Scheme (CSS). The Modi government has displayed utter insensitivity for administrative efficiency by including these expressions just to phonetically make it sound like 'G RAM G'.
MGNREGA Job Guarantee Effectively Evaporates
The MGNREGA Act offered an unambiguous, demand-based, guaranteed 100 days’ work to every rural household at any time of the year. The G RAM G Bill dilutes it massively, while only nominally raising it to 125 days.
The G RAM G guarantee will not be available during at least a 60 days' period, which all states will have to notify as “peak agricultural seasons of sowing and harvesting” in advance.
During periods of famine/draught/floods, there is unemployment crisis even in agricultural seasons. In such periods of “natural calamities or other extraordinary circumstances”, the state governments would have to seek “specific relaxations” which the Central government will have the discretion to grant or refuse, subject to conditions.
The states/Panchayats will no longer be able to honour 100-days’ work guarantee by creating local labour-intensive works as all G RAM G works will have to be aligned to the “national vision of Viksit Bharat @2047”.
The G RAM G guarantee will operate within the four walls of normative budget allocation for states as decided by the Central government. In effect, the MGNREGA guarantee is substantially diluted if not fully evaporated.
Centre Shifts Expenditure Obligations to States
The MGNREGA was a credible guarantee, as it was backed by the Central government's commitment to bear 100 percent wage expenditure. The G RAM G Bill allows the Central government to walk away from this commitment.
The Central government would now have to foot only 60 percent of the wage cost, that too, within the state-specific normative allocations, unilaterally decided by it. The Central government share for material component has also been reduced from 75 percent to 60 percent.
The Central government will have the right “to order stoppage of release of funds” and “institute appropriate remedial measures” in cases of “any complaint regarding any issue or improper utilisation of funds”. This will be easily weaponised to 'discipline' Opposition states as was done by keeping MGNREGA funds suspended to West Bengal for the last three years.
There cannot be any bigger misalignment of the guarantor’s political claim and its financial cost.
Over-Centralisation Reduces States to Municipalities
A municipality in India has many statutory obligations but no ability to raise funds. The G RAM G Bill reduces states to municipalities.
The Central government will have enormous authority to impose statutory obligations on state governments. To cite a few,
State governments would have to make job guarantee scheme consistent with the provisions of the G RAM G Bill.
All works shall have to originate in Viksit Gram Panchayat Plans, prepared in line with provisions of the G RAM G Bill, consolidated at block, district and state levels and finally aggregated into Viksit Bharat National Rural Infrastructure Stack.
The Central government shall specify wage rate and can specify different rates for different states and regions within a state.
The Central government will have authority to give such directions as it considers necessary.
The G RAM G Scheme will be implemented as a CSS, giving the Central government further leeway in scheme formulation, choice of works, funds flow, naming and imposition of other obligations.
The G RAM G Bill exemplifies the worst form of fiscal unionism, trampling upon cooperative federalism institutionalised in the Constitution.
Unconstitutional at its Core
The Central government has no constitutional authority to interfere in the exercise of states’ executive authority in state list subjects and to impose any obligations on them. Article 282 allows the Central government to offer grants on state subjects, nothing more. No statutory obligations can be imposed under Article 282.
The CSSs derive their legitimacy from Article 282. As G RAM G is a CSS, no statutory obligations can be imposed on states. The bill also strikes at the root of India’s federal character, which constitutes a basic structure.
The G RAM G Bill is, therefore, ultra vires the Constitution. The states must challenge it in the Supreme Court.
The states would be terrible losers if they operate the G RAM G Bill guarantee as subordinate authorities of the Central government. To keep their entity and relevance intact, they must continue to provide a MGNREGA guarantee, without any dilution. For this, they may consider, until the Supreme Court decides, implementing MGNREGA guarantee, using provisions of Section 30 of the G RAM G Bill, which allows better state schemes to continue.
(Subhash Chandra Garg is the Chief Policy Advisor, SUBHANJALI, and Former Finance and Economic Affairs Secretary, Government of India. He's the author of many books, including 'The $10 Trillion Dream Dented, 'We Also Make Policy', and 'Explanation and Commentary on Budget 2025-26'. This is an opinion piece, and the views expressed above are the author’s own. The Quint neither endorses nor is responsible for the same.)