Centre releases ₹95,692 crore to states in rural jobs push ahead of July 1
Synopsis
The Centre has pushed over ₹95,692 crore to states and UTs in a single interim release, taking total rural outlay past ₹1.25 lakh crore just weeks before the MGNREGA successor scheme — VB-GRAM-G — goes live on 1 July. With 2.8 lakh gram panchayats in the frame and four states still lagging on compliance, the scale of this transition is without modern precedent in rural employment policy.
Key Takeaways
The Centre released an interim allocation of ₹95,692.31 crore to states and Union Territories on 9 June .
Combined with ₹30,000 crore already disbursed under MGNREGA , total rural outlay has crossed ₹1.25 lakh crore .
Funds will reach nearly 2.8 lakh gram panchayats ; Uttar Pradesh is the largest state recipient at ₹12,221.48 crore .
The new VB-GRAM-G framework replaces MGNREGA from 1 July ; 26 states have made budgetary provisions.
Jharkhand , Karnataka , Telangana , and Mizoram have been urged to complete compliance; minister Shivraj Singh Chouhan will write to their Chief Ministers. ₹1,850.62 crore has been separately earmarked for central administration and social audit.
The Centre has released an interim allocation of ₹95,692 crore to states and Union Territories, Union Rural Development Minister Shivraj Singh Chouhan announced on 9 June, adding this to the ₹30,000 crore already disbursed under MGNREGA to push the total rural outlay past the ₹1.25 lakh crore mark. The funds are set to reach nearly 2.8 lakh gram panchayats across the country ahead of a sweeping policy transition taking effect on 1 July.
What the Allocation Covers
Of the total interim release, ₹92,550.17 crore has been apportioned among 28 states, with Uttar Pradesh receiving the largest share at ₹12,221.48 crore, followed by West Bengal at ₹8,508 crore and Tamil Nadu at ₹7,957.57 crore. Andhra Pradesh (₹7,707.21 crore), Rajasthan (₹7,581.87 crore), and Bihar (₹6,715.83 crore) are among the other major recipients.
Union Territories collectively received ₹1,291.32 crore, with Jammu and Kashmir accounting for the bulk at ₹1,151.02 crore. An additional ₹1,850.62 crore has been set aside for central administration and social audit, bringing the total interim allocation to ₹95,692.31 crore.
The New Rural Employment Framework
Minister Chouhan chaired a video conference with Rural Development Ministers of states and Union Territories to discuss implementation of the Viksit Bharat – Guarantee for Rozgar and Ajeevika Mission (Gramin), or VB-GRAM-G. The scheme, framed under the guidance of Prime Minister Narendra Modi, consolidates rural employment, workers' security, and village development under a single legislative and financial architecture.
The minister stressed that funds must be deployed specifically for development works identified under the VB-GRAM-G Act, ensuring both employment generation and durable rural asset creation. He also directed that MGNREGA wage payments and employment generation must continue without interruption until the new arrangement takes over on 1 July.
Digital Readiness and State Compliance
Chouhan noted that 26 states have already made budgetary provisions aligned with the Viksit Bharat – Gramin Bharat objective. However, Jharkhand, Karnataka, Telangana, and Mizoram were specifically urged to complete the process at the earliest, with the minister indicating he would write personally to their Chief Ministers.
Mizoram, Puducherry, and Andhra Pradesh were commended for issuing the required notifications ahead of schedule. States were also directed to notify agricultural peak seasons, achieve 100 per cent e-KYC completion, and organise capacity-building programmes at district and block levels.
On digital infrastructure, the minister highlighted progress in direct benefit transfer (DBT), SMS-based information systems, and face authentication as indicators of a smooth transition. Works will be selected through gram panchayats and gram sabhas, with proposals forming the basis for final approvals.
What Happens Next
States have been urged to grant advance approvals for an adequate pipeline of works so that implementation can begin at full pace from 1 July itself. The Centre has signalled that timely wage payments and uninterrupted development works are non-negotiable conditions of the new arrangement. This comes amid a broader push to ensure that the transition from MGNREGA to the VB-GRAM-G framework does not create gaps in rural livelihoods.
Point of View
692 crore interim release is large in absolute terms, but its significance lies in what it precedes — a structural replacement of MGNREGA with the VB-GRAM-G framework. Transitions of this scale in rural employment have historically created wage-payment gaps at the panchayat level, and the Centre's own directive to 'ensure no disruption' implicitly acknowledges that risk. Four states — Jharkhand, Karnataka, Telangana, and Mizoram — have yet to complete budgetary provisions, and these are not small states in rural employment terms. The test of this allocation will not be the headline number but whether wages reach workers' accounts without a single missed cycle on or after 1 July.
NationPress
12 Aug 2026
Frequently Asked Questions
What is the ₹95,692 crore allocation announced by the Centre?
It is an interim release of funds to states and Union Territories under the new Viksit Bharat – Guarantee for Rozgar and Ajeevika Mission (Gramin) framework, announced on 9 June by Rural Development Minister Shivraj Singh Chouhan. Combined with ₹30,000 crore already allocated under MGNREGA, the total rural outlay has crossed ₹1.25 lakh crore.
What is the VB-GRAM-G scheme and how does it differ from MGNREGA?
The Viksit Bharat – Guarantee for Rozgar and Ajeevika Mission (Gramin), or VB-GRAM-G, is a new rural employment and livelihood framework taking effect from 1 July. It consolidates employment generation, workers' security, and rural asset creation under a single legislative structure, with works selected through gram panchayats and gram sabhas.
Which states received the largest allocations?
Uttar Pradesh received the largest share at ₹12,221.48 crore, followed by West Bengal (₹8,508 crore), Tamil Nadu (₹7,957.57 crore), Andhra Pradesh (₹7,707.21 crore), and Rajasthan (₹7,581.87 crore). Among Union Territories, Jammu and Kashmir received the most at ₹1,151.02 crore.
Which states are yet to complete compliance for the new scheme?
Jharkhand, Karnataka, Telangana, and Mizoram have been specifically urged to complete budgetary provisions. Minister Chouhan indicated he would personally write to the Chief Ministers of these states to expedite the process.
Will MGNREGA payments continue until 1 July?
Yes. Minister Chouhan explicitly directed that there should be no reduction or disruption in employment generation and wage payments under MGNREGA until the new VB-GRAM-G arrangement takes over on 1 July.
