VB–G RAM G Act to Benefit States by ₹17,000 Crore, SBI Report Counters Congress Claims

New Delhi:
Even as the Congress prepares to launch a nationwide campaign against the newly enacted Viksit Bharat Guarantee for Employment and Livelihood Mission (VB–G RAM G) Act, a latest report by the State Bank of India (SBI) has sharply contradicted the opposition’s claims, stating that the law will not financially burden states but instead benefit them by nearly ₹17,000 crore.

One of the principal objections raised against the Act—introduced as a replacement for MGNREGA—has been the concern that it would reduce the Centre’s financial support and force states to shoulder a heavier burden. However, SBI’s analysis suggests the opposite. According to the report, states are likely to receive higher net allocations under the new framework, especially when their own contributions are factored in.

States to Gain Under the New Framework

The SBI report is based on the average allocations received by states under MGNREGA over the past seven years. It evaluates the VB–G RAM G Act across seven key parameters, rooted in the twin principles of equity and efficiency. The assessment concludes that, compared to previous funding patterns, states collectively stand to gain around ₹17,000 crore, indicating that most states will emerge as net beneficiaries.

“Based on the average allocations of the last seven years, our estimates indicate that states could benefit by approximately ₹17,000 crore, suggesting a scenario where the majority of states will be better off,” the report states.

Controversy Over 60:40 Funding Ratio

A major flashpoint of criticism has been the shift in the funding pattern between the Centre and states to a 60:40 ratio, with states contributing 40 percent. This change, however, does not apply to Northeastern states, Union Territories, and Himalayan states, which continue to receive special consideration.

The Congress has argued that this revised ratio would strain state finances and force them to borrow more. SBI has firmly rejected this argument, calling it a misinterpretation of the funding structure. “The concerns about fiscal stress arising from the revised funding ratio stem from a misunderstanding of how state finances operate under the new framework,” the report notes.

Key States Likely to Benefit

SBI compared projected allocations under VB–G RAM G with the average MGNREGA allocations from FY 2019 to FY 2025 (excluding FY 2021). The findings suggest that most states will see gains, while only two states may experience marginal reductions.

States expected to benefit the most include Uttar Pradesh and Maharashtra, followed by Bihar, Chhattisgarh, and Gujarat, according to the report.

More Employment Days for Rural Families

The VB–G RAM G Bill, passed during Parliament’s Winter Session, has now become law. A key feature of the legislation is the enhancement of employment security for rural households. Under the new Act, the guaranteed employment days have been increased from 100 days to 125 days per year for adult members of rural families.

Political Debate Continues

Despite the SBI findings, the Congress is expected to intensify its opposition to the law in the coming days, positioning it as detrimental to federal finances. However, the banking major’s report significantly weakens the argument that states will lose out under the new employment guarantee framework.

As the political debate unfolds, the SBI assessment provides strong economic backing to the government’s claim that the VB–G RAM G Act is designed to strengthen rural livelihoods while ensuring better financial outcomes for states.