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Panel Flags Transition Risks as SBI Projects State Gains Under New Rural Jobs Law

The six-month shift to a capped, cost-shared model is prompting questions over wage payments and budget support.

Overview

  • Parliament’s VB‑G RAM G Act, which replaced MGNREGA after presidential assent on December 21, guarantees 125 days of work and introduces a 60:40 Centre–state funding split, with higher central shares for Himalayan and north‑eastern states.
  • The Parliamentary Standing Committee on Rural Development reviewed the handover on Monday, raising concerns about ensuring timely wages, arranging extra funds and completing rule‑making during the six‑month transition.
  • The rural development ministry has circulated a briefing for ministers to defend the overhaul, highlighting predictable normative allocations and asset creation, as Congress prepares nationwide protests against the law.
  • An SBI Research analysis estimates states would collectively gain about ₹17,000 crore versus recent average allocations under a normative formula, with Uttar Pradesh and Maharashtra among the biggest beneficiaries and only two states seeing marginal losses.
  • The Act shifts from a demand‑driven guarantee to centrally determined caps, mandates digital weekly payments and allows a 60‑day pause for peak farm seasons, while critics warn the change weakens the rights‑based assurance and point to falling person‑days in Assam as a warning sign.