Despite Centre’s delay, States, U.T.s, set aside funds for rural jobs programme

With the Centre yet to notify the formula for determining State‑wise normative allocations under the Viksit Bharat Guarantee for Rozgar and Ajeevika Mission (Gramin) Act, 2025, at least 24 States and Union Territories have nevertheless earmarked funds for the new rural employment programme.

Under the Act, States must bear 40% of the scheme’s expenditure, except in the northeastern and hilly States and UTs such as Jammu & Kashmir, which receive a relaxation.

Union Rural Development Minister Shivraj Singh Chouhan informed the Rajya Sabha on Tuesday (March 17, 2026) that 27 States and UTs are making provisions for the new scheme, though he read out allocations for only 24 of them, amounting to a little over ₹31,000 crore. The Union Budget for 2026‑27 has set aside ₹95,652 crore as the Centre’s share.

Responding to criticism that States may struggle to shoulder their share of the financial burden, Mr. Chouhan highlighted that even Congress‑ruled Himachal Pradesh, despite its opposition to the Act, has allocated ₹143 crore. Karnataka, he noted, is the only major outlier. “Many members asked where States will find the money. I am only addressing their anxiety,” he said.

A key pending element is the Centre’s formula for normative allocation. Section 4(5) of the Act mandates that the Central government determine State‑wise allocations annually based on “objective parameters”. The clause aims to ensure equitable distribution, following complaints from economically weaker States that they receive disproportionately lower funding.

In the absence of clarity, most States have used their past expenditure under MGNREGA as the baseline while also accounting for the additional 25 workdays promised under new Act, which extends guaranteed employment from 100 to 125 days. For instance, Rajasthan has spent over ₹7,597 crore under MGNREGA so far, this financial year. Its 40% share comes to roughly ₹3,038 crore. The State, keeping a margin for the expanded work guarantee and anticipating uncertainty in Central allocations, has set aside ₹4,000 crore.