New Delhi: The Viksit Bharat Guarantee for Rozgar and Ajeevika Mission (VB-G RAM G) Act is expected to significantly boost state finances, with states collectively set to gain nearly Rs 17,000 crore under the new framework, according to a report by the State Bank of India (SBI).
The legislation, which replaces the earlier MGNREGA structure, has triggered debate over concerns that the revised funding pattern could increase the financial burden on states.
SBI’s analysis, based on a simulated normative assessment of the Centre’s contribution, suggests that states will remain net beneficiaries under the Act.
The assessment, built on seven parameters rooted in equity and efficiency, compares projected allocations with the average funding received by states over the past seven years. It concludes that most states stand to gain, with only two recording marginal losses.
Addressing criticism over the revised 60:40 Centre-state funding ratio, SBI said fears of fiscal stress or higher borrowing are largely misplaced.
The report noted that an objective evaluation shows improved overall fund distribution, with Uttar Pradesh and Maharashtra expected to see the largest gains, followed by Bihar, Chhattisgarh and Gujarat.
The VB-G RAM G Act, cleared by Parliament during the winter session and receiving presidential assent on 21 December, guarantees 125 days of wage employment per rural household, up from 100 days earlier.
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