VBGRG Scheme to Impose Additional Burden of Rs 55,300 Crore on States: V. Sivadasan MP

New Delhi: Dr. V. Sivadasan, MP, stated that the central government is attempting to shift the financial burden of the employment guarantee scheme onto the state governments through the new employment scheme, VBGRG. In response to a question raised in the Rajya Sabha, the Centre clarified that under the new scheme, the cost will be shared between the Centre and the states in a 60:40 ratio.

Currently, under the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS), the central government bears 100 percent of the wage costs, while 75 percent of the material costs are also funded by the Centre. However, over the past five years, central financial assistance for the scheme has been declining. According to figures presented in the Rajya Sabha, the assistance amounted to Rs 1,11,171 crore in 2020–21, Rs 98,468 crore in 2021–22, Rs 90,810 crore in 2022–23, Rs 89,268 crore in 2023–24, and Rs 85,839 crore in 2024–25. This trend indicates a gradual reduction in central funding for the program.

V. Sivadasan expressed concern that the continuous reduction in financial assistance is worrisome, especially given the increasing demand for rural employment. While the government states that Rs 95,692 crore has been allocated as the central share for the new scheme, the total project cost of Rs 1.51 lakh crore includes the share of the state governments. It is clear from the reply that the rural employment guarantee scheme will impose an additional burden of Rs 55,300 crore on the states.

Sivadasan demanded that the central government should not reduce its financial responsibility in a scheme designed to ensure employment rights for rural India and urged it to refrain from actions that weaken the employment guarantee program.