Centre announces interim allocation for VB-GRAMG

Published 9 June 2026 · india

Union Rural Development Minister Shivraj Singh Chouhan on Tuesday (June 9, 2026) announced an interim allocation of ₹95,962 crore for the new rural employment scheme

Union Rural Development Minister Shivraj Singh Chouhan on Tuesday (June 9, 2026) announced an interim allocation of ₹95,962 crore for the new rural employment scheme, the Vikshit Bharat Guarantee for Rozgar and Ajeevika Mission Gramin (VB-GRAMG). This sum does not include the State governments’ share. Most States will have to contribute an additional 40% of the sum allocated to them. The combined outlay for the scheme will be ₹1.51 lakh crore. Chouhan said that the allocation had been made even before notifying the scheme’s rules and framing the formula dictating distribution to different States, to ensure “a seamless transition” from the Mahatma Gandhi Rural Employment Guarantee Scheme (MGNREGS). No State, he said, would face any reduction in funds.

“Without causing any inconvenience to workers, we are moving from MGNREGA to VB-GRAMG. There will not be a gap of even a single day in the availability of work,” he said. Funding formula According to the Rural Development Ministry, Uttar Pradesh has been allotted the highest interim allocation of ₹9,721.48 crore, followed by West Bengal (₹8,508 crore), Tamil Nadu (₹7,585.49 crore), Rajasthan (₹7,581.87 crore), Andhra Pradesh (₹7,707.21 crore) and Bihar (₹6,715.83 crore). The total allocation for States stands at ₹92,550.17 crore, while Union Territories have been allocated ₹1,291.52 crore. An additional ₹1,850.62 crore has been earmarked for central administration and social audits, taking the total to ₹95,692.31 crore. The allocation is largely in line with funds given to States under MGNREGA in previous financial years.

The thrust of the new programme, however, is to ensure that the employment scheme has a wider presence in economically weaker States, as indicated by the proposal in the draft rules to use the 16th Finance Commission’s horizontal devolution formula to determine Central allocations to States. The final formula for distributing the funds, expected to be notified on July 1, could alter the future share of different States. Four States not ready Chouhan also said that 26 States have completed the procedural requirements necessary to implement the new scheme, while four States — Jharkhand, Karnataka, Telangana, and Mizoram — are yet to complete all formalities. However, representatives of these States also attended the meeting and assured the Centre that they were preparing for implementation.

Prior to the implementation of the VB-GRAMG scheme, States have to frame rules, complete e-KYC of beneficiaries, fix the blackout period according to their agricultural cycles, and carry out capacity-building exercises at the district and block levels. Despite a change in government in West Bengal, with the BJP now in power, the issue of settling pending dues under MGNREGA, worth ₹8,508 crore, continues to remain unresolved. “Till those disputes are settled, that question does not arise. For the remaining period, the West Bengal government has given in writing that it is ready to accept all the rules and conditions of the Central government,” Mr. Chouhan said.