Indian States Lift FY27 Rural Job Outlays 21% to Rs 86,271 Crore as North-South Divide Widens
Updated
Updated · Moneycontrol · Jul 2
Indian States Lift FY27 Rural Job Outlays 21% to Rs 86,271 Crore as North-South Divide Widens
3 articles · Updated · Moneycontrol · Jul 2
Summary
Rs 86,271 crore has been budgeted by major Indian states for rural employment in FY27, up from Rs 71,068 crore in FY26, after the VB G-RAM-G scheme took effect on July 1.
The new program set a Rs 300 base wage and replaced MGNREGA with a 125-day employment guarantee, helping drive higher allocations in many state budgets.
West Bengal led the increases with a more than five-fold jump to Rs 9,764 crore, while Odisha more than doubled spending to Rs 7,827 crore and Chhattisgarh raised it 138% to Rs 3,445 crore.
Southern states mostly held back: Tamil Nadu cut spending 16.4% to Rs 3,251 crore, Andhra Pradesh reduced it 9.1% to Rs 5,415 crore, and Karnataka and Kerala were broadly flat.
Maharashtra remained the biggest spender at Rs 21,208 crore—nearly one-fourth of the total—even as some northern states also diverged, with Madhya Pradesh slashing outlays 48% and Bihar trimming 6.7%.
Is India's new employment act a pro-growth reform or a quiet dismantling of its rural safety net?
Can state governments afford the new rural employment scheme without cutting other essential services?
Will the new act's mandatory tech exclude the most vulnerable rural workers from their right to employment?
125 Days of Guaranteed Rural Work: Inside India’s VB-G RAM G Act and Its Digital Overhaul
Overview
On July 1, 2026, India ushered in a new era for rural development with the Viksit Bharat–Guarantee for Rozgar and Ajeevika Mission (Gramin) Act, 2025 (VB-G RAM G Act). This Act replaces the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) of 2005, which guaranteed 100 days of wage employment each year. Building on MGNREGA’s foundation, the VB-G RAM G Act introduces advanced technology and modernizes rural employment schemes. Its goal is to make rural development more efficient, transparent, and impactful, ensuring better livelihood security and infrastructure for rural communities across the nation.