Karnataka to Launch New Rural Employment Scheme From July 1 Despite Concerns Over Rising Costs
The state government will roll out the new rural jobs program while continuing to oppose the increased financial burden imposed under the revised funding model.
The Karnataka government has decided to move ahead with the implementation of the Viksit Bharat Guarantee for Rozgar and Ajeevika Mission Gramin, known as VB G RAM G, from July 1, even as it raises strong objections to the scheme’s funding structure.
Announcing the decision, Rural Development and Panchayat Raj Minister Eshwar Khandre said the government could not afford to delay the program because it provides crucial employment support to rural workers, women, and vulnerable communities across the state.
The new scheme replaces the Mahatma Gandhi National Rural Employment Guarantee Act, which has been in operation for nearly two decades. Under the earlier arrangement, the central government carried most of the financial responsibility, covering up to 90 percent of wage costs, while states contributed only a small share.
With the introduction of VB G RAM G, funding will now follow a 60:40 ratio between the Centre and the states. Karnataka says this change significantly increases its financial commitment and places additional pressure on state finances.
Highlighting the impact of the revised model, Khandre noted that between 2006 and 2026, the Centre spent more than ₹56,000 crore on rural employment programs in Karnataka, while the state’s contribution was around ₹4,800 crore. Under the new system, Karnataka will be required to provide ₹3,806 crore in a single financial year to access the Centre’s allocation of ₹5,709 crore.
The state government has criticized the Centre for introducing the legislation without extensive consultations with state governments. Karnataka has challenged aspects of the scheme before the Supreme Court and is urging the Centre to revise the funding pattern to an 80:20 ratio, which it believes would be more practical for states.
Another point of concern is a proposed rule that would suspend work under the scheme for 60 days during peak farming seasons. State officials argue that such a restriction could create hardship for landless workers who depend on employment programs for income and may force many to migrate in search of work.
Despite its objections, the Karnataka government has approved the required funds to ensure there is no disruption in employment opportunities when the new scheme comes into effect next month. Chief Minister D.K. Shivakumar has already cleared the state’s share of ₹3,806 crore for the rollout.