Why Modi government's VB-GRAM G Act is a governance imperative

India's journey towards Viksit Bharat @2047 cannot be charted on the strength of urban growth alone.

- TUHIN A. SINHA

Nearly two-thirds of the country's population still lives in rural and semi-rural areas, and their productivity, incomes, and resilience will determine whether India's economic rise is inclusive and sustainable. It is against this backdrop that the Modi government's Viksit Bharat — Guarantee for Rozgar and Ajeevika Mission (Gramin), popularly known as the VB-GRAM G Act, 2025, must be understood not as a welfare tweak, but as a governance reset.

The new legislation consciously replaces the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA), recognising that an instrument designed for the economic realities of 2005 cannot adequately serve the ambitions of a rapidly transforming India in the mid-2020s. What the VB-GRAM G Act attempts is a fundamental re-imagining of rural employment—from a short-term safety net into a durable engine of rural productivity and national growth.

Rural employment: From safety net to growth enabler

Rural employment programmes in India have always carried a dual burden. On one hand, they must provide income security to households vulnerable to seasonal distress. On the other hand, they must justify large public expenditure by leaving behind assets that raise long-term rural productivity. MGNREGA's early years did succeed in cushioning rural distress, particularly after agrarian shocks and droughts. Yet, over time, the programme drifted into a narrow conception of 'employment for employment's sake.'

India's rural economy today is no longer the same as it was two decades ago. Agricultural mechanisation, expanding rural roads, digital penetration, electrification, and rising aspirations have reshaped labour markets. Rural youth increasingly seek continuity of work, skill relevance, and pathways to higher incomes—not merely intermittent wage employment. In this changed scenario, a programme that prioritises headcount over outcomes inevitably loses relevance.

Why MGNREGA became sub-optimal