Union Sets ₹300 Daily Floor Wage under New VB‑GRAM G Act Replacing MGNREGA

Union Sets ₹300 Daily Floor Wage under New VB‑GRAM G Act Replacing MGNREGA The Union government has announced a floor wage of ₹300 per day under the VB‑GRAM G Act. The notification came into force on 1 July 2026 , ending the MGNREGA . States that paid less than ₹300 now have to raise wages, while those already above ₹300 see modest hikes. Key Developments Four Hindi‑belt states receive the biggest hikes: Uttar Pradesh (+₹48), Bihar (+₹45), Madhya Pradesh (+₹39) and Rajasthan (+₹19). Several northern and northeastern states cross the 15% increase threshold to reach the ₹300 floor. Haryana retains the highest wage at ₹409 but its increase is only 2.25%. Telangana records the smallest rise – ₹1 (0.33%) – moving from ₹307 to ₹308. States already above ₹300, such as Andhra Pradesh, Tamil Nadu and Karnataka, see hikes of 1.6‑3.2%. Sikkim has a special rate of ₹450 for certain gram panchayats. Important Facts The new floor wage applies to 21 States and Union Territories. Under the new cost‑sharing arrangement , both labour and material expenses are shared 60:40, unlike MGNREGA where only material costs were shared. The Parliamentary Standing Committee on Rural Development has repeatedly urged higher wages. Congress leader Jairam Ramesh calls the ₹300 floor “unjustifiably low” and cites the 2019 expert committee recommendation of a ₹375 minimum wage. The opposition demands a national daily minimum wage of ₹400 under its Shramik Nyay programme . UPSC Relevance This development touches several UPSC topics. It illustrates the shift from a rights‑based, demand‑driven scheme (MGNREGA) to a supply‑driven model (VB‑GRAM G), highlighting federal‑centre relations and fiscal federalism (GS2). The wage floor and cost‑sharing affect rural employment, agrarian distress, and inflationary pressures, linking to rural development and poverty alleviation (GS3). Political opposition and parliamentary debates provide material for questions on governance, policy evaluation, and the role of opposition parties (GS2). Way Forward For aspirants, focus on comparing the two schemes: coverage, funding, wage structure, and implementation challenges. Track how states adjust budgets under the new sharing formula and monitor political responses, especially the Congress demand for a ₹400 national minimum wage. Understanding these dynamics will help answer questions on rural employment policy, fiscal federalism, and labour welfare in the UPSC mains and prelims.