All workers shifted to VB-G RAM G; e-KYC not mandatory, says Rural Development Ministry
Introduction
The Union Rural Development Ministry’s recent clarification that electronic Know Your Customer (e-KYC) is not mandatory for workers under the newly launched Viksit Bharat Guarantee for Rozgar and Ajeevika Mission (Gramin) — abbreviated as VB-G RAM G — marks a significant policy correction in India’s rural employment architecture. This statement came after reports indicated that around 57 lakh active workers risked exclusion from the scheme due to pending e-KYC verification, raising concerns about the continuity of employment guarantees for vulnerable rural households. The Ministry asserted that all workers registered under the erstwhile Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) have been automatically migrated to VB-G RAM G, and that pending e-KYC will not prevent them from demanding or receiving work.
Context: From MGNREGA to VB-G RAM G
The VB-G RAM G scheme, enacted through the Viksit Bharat-G RAM G Act, 2025, replaces the iconic MGNREGA as India’s flagship rural employment guarantee programme. While MGNREGA guaranteed 100 days of unskilled wage employment per rural household annually, VB-G RAM G aims to expand this to 125 days and integrate additional livelihood and skill components under a broader “Rozgar and Ajeevika” (employment and livelihood) mission. The transition was designed to modernise implementation, improve targeting, and strengthen direct benefit transfers (DBT) through robust authentication mechanisms such as e-KYC.
Under the new framework, existing MGNREGA job cards that have completed e-KYC remain valid until new Gramin Rozgar Guarantee Cards are issued. However, early implementation data revealed that a substantial number of active workers — approximately 57 lakh — had not completed e-KYC, potentially jeopardising their access to work. This triggered alarm among civil society groups, researchers, and opposition parties, who warned that millions of rural workers could be left without employment during the transition.
The Ministry’s Clarification: e-KYC Not Mandatory
In response to these concerns, the Union Rural Development Ministry issued a statement on August 30, 2026, clarifying that e-KYC is not a precondition for employment under VB-G RAM G. The Ministry emphasised that every worker registered under MGNREGA has been migrated to VB-G RAM G, regardless of e-KYC status. It further stated that pending e-KYC does not prevent a worker from demanding or receiving employment, and that an “appropriate exception mechanism” is available to facilitate work for such workers.
The Ministry also described e-KYC as a “simple” process taking less than 30 seconds, and reiterated that it is primarily a database-authentication measure rather than a barrier to statutory rights. While e-KYC remains a condition for availing work in normal circumstances, the government assured that no willing worker would be deprived of employment merely because e-KYC is pending. This clarification effectively decouples the legal right to work from the administrative requirement of e-KYC, at least during the transition phase.
Why e-KYC Became a Flashpoint
The e-KYC requirement was introduced to strengthen the credibility of the worker database, reduce ghost beneficiaries, and ensure that wages are transferred only to verified accounts. Under MGNREGA, e-KYC involved linking the worker’s Aadhaar with their job card and bank account, followed by biometric or OTP-based authentication. While this improved transparency, it also created exclusion risks for workers facing technological, infrastructural, or documentation barriers.
Reports in late August 2026 highlighted that only about 71% of registered workers had completed e-KYC two months into VB-G RAM G’s operation. Consequently, person-days generated under the new scheme in July 2026 were nearly 50% lower than under MGNREGA in the same month the previous year. This sharp decline raised questions about whether the transition was inadvertently undermining the very safety net it sought to strengthen.
Implications for Rural Employment Guarantees
The Ministry’s clarification has several important implications:
The Union Rural Development Ministry’s recent clarification that electronic Know Your Customer (e-KYC) is not mandatory for workers under the newly launched Viksit Bharat Guarantee for Rozgar and Ajeevika Mission (Gramin) — abbreviated as VB-G RAM G — marks a significant policy correction in India’s rural employment architecture. This statement came after reports indicated that around 57 lakh active workers risked exclusion from the scheme due to pending e-KYC verification, raising concerns about the continuity of employment guarantees for vulnerable rural households. The Ministry asserted that all workers registered under the erstwhile Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) have been automatically migrated to VB-G RAM G, and that pending e-KYC will not prevent them from demanding or receiving work.
Context: From MGNREGA to VB-G RAM G
The VB-G RAM G scheme, enacted through the Viksit Bharat-G RAM G Act, 2025, replaces the iconic MGNREGA as India’s flagship rural employment guarantee programme. While MGNREGA guaranteed 100 days of unskilled wage employment per rural household annually, VB-G RAM G aims to expand this to 125 days and integrate additional livelihood and skill components under a broader “Rozgar and Ajeevika” (employment and livelihood) mission. The transition was designed to modernise implementation, improve targeting, and strengthen direct benefit transfers (DBT) through robust authentication mechanisms such as e-KYC.
Under the new framework, existing MGNREGA job cards that have completed e-KYC remain valid until new Gramin Rozgar Guarantee Cards are issued. However, early implementation data revealed that a substantial number of active workers — approximately 57 lakh — had not completed e-KYC, potentially jeopardising their access to work. This triggered alarm among civil society groups, researchers, and opposition parties, who warned that millions of rural workers could be left without employment during the transition.
The Ministry’s Clarification: e-KYC Not Mandatory
In response to these concerns, the Union Rural Development Ministry issued a statement on August 30, 2026, clarifying that e-KYC is not a precondition for employment under VB-G RAM G. The Ministry emphasised that every worker registered under MGNREGA has been migrated to VB-G RAM G, regardless of e-KYC status. It further stated that pending e-KYC does not prevent a worker from demanding or receiving employment, and that an “appropriate exception mechanism” is available to facilitate work for such workers.
The Ministry also described e-KYC as a “simple” process taking less than 30 seconds, and reiterated that it is primarily a database-authentication measure rather than a barrier to statutory rights. While e-KYC remains a condition for availing work in normal circumstances, the government assured that no willing worker would be deprived of employment merely because e-KYC is pending. This clarification effectively decouples the legal right to work from the administrative requirement of e-KYC, at least during the transition phase.
Why e-KYC Became a Flashpoint
The e-KYC requirement was introduced to strengthen the credibility of the worker database, reduce ghost beneficiaries, and ensure that wages are transferred only to verified accounts. Under MGNREGA, e-KYC involved linking the worker’s Aadhaar with their job card and bank account, followed by biometric or OTP-based authentication. While this improved transparency, it also created exclusion risks for workers facing technological, infrastructural, or documentation barriers.
Reports in late August 2026 highlighted that only about 71% of registered workers had completed e-KYC two months into VB-G RAM G’s operation. Consequently, person-days generated under the new scheme in July 2026 were nearly 50% lower than under MGNREGA in the same month the previous year. This sharp decline raised questions about whether the transition was inadvertently undermining the very safety net it sought to strengthen.
Implications for Rural Employment Guarantees
The Ministry’s clarification has several important implications:
- Continuity of Rights: By affirming that pending e-KYC does not block employment, the government has upheld the statutory nature of the employment guarantee. This is crucial for maintaining trust among rural workers, especially during a major legislative transition.
- Administrative Flexibility: The introduction of an “exception mechanism” allows states and Union Territories to process work demands even when e-KYC is incomplete. This flexibility is essential in regions with low digital literacy, poor connectivity, or inadequate last-mile infrastructure.
- Data Integrity vs. Inclusion: The episode underscores the tension between database integrity and social inclusion. While e-KYC improves targeting, rigid enforcement can exclude genuine beneficiaries. The government’s course correction reflects a pragmatic balance between these objectives.
- Federal Dynamics: Since e-KYC implementation is largely the responsibility of state and UT governments, the Centre’s statement also serves as guidance to states to avoid exclusionary practices. This reinforces the cooperative federalism model in social sector governance.
Broader Governance Lessons
For students of public policy and governance, this episode offers several lessons:
For students of public policy and governance, this episode offers several lessons:
- Transition Management: Major policy transitions require careful phasing, monitoring, and contingency planning. The VB-G RAM G rollout shows that even well-intentioned reforms can create unintended exclusion if implementation lags behind design.
- Digital Governance Risks: Digital authentication systems, while efficient, can become barriers if not accompanied by robust exception-handling mechanisms. Policymakers must anticipate and mitigate such risks proactively.
- Responsive Governance: The Ministry’s swift response to media reports and public concerns demonstrates the value of responsive governance. Timely clarifications can prevent policy misinterpretations and protect vulnerable populations.
- Statutory Safeguards: The fact that the employment guarantee is a legal right, not a discretionary benefit, acted as a safeguard against exclusion. This highlights the importance of rights-based legislation in social protection.
Challenges Ahead
Despite the clarification, challenges remain:
Despite the clarification, challenges remain:
- Awareness Gap: Many rural workers may not be aware that they can demand work without completed e-KYC. Effective communication campaigns are needed to disseminate this information.
- Implementation Consistency: States and UTs must uniformly apply the exception mechanism to avoid arbitrary exclusion. Monitoring and grievance redressal systems will be critical.
- Long-Term e-KYC Completion: While e-KYC is not mandatory now, completing it remains important for long-term database accuracy and seamless wage transfers. The government must support states in accelerating this process without coercion.
- Scheme Performance: The sharp drop in person-days generated under VB-G RAM G compared to MGNREGA needs to be addressed to ensure the new scheme delivers on its promise of enhanced employment.
Conclusion
The Rural Development Ministry’s assurance that e-KYC is not mandatory for workers under VB-G RAM G is a timely and necessary intervention to protect the employment rights of millions of rural Indians. It reaffirms the government’s commitment to the principle that no willing worker should be denied employment due to administrative hurdles. At the same time, it highlights the complexities of transitioning from a legacy scheme like MGNREGA to a modernised framework like VB-G RAM G. For UPSC aspirants, this episode encapsulates key themes in governance: rights-based entitlements, digital inclusion, federal coordination, and adaptive policy implementation. As India moves towards a “Viksit Bharat” (Developed India), ensuring that no worker is left behind in the digital transition will remain a critical test of inclusive development.
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The Rural Development Ministry’s assurance that e-KYC is not mandatory for workers under VB-G RAM G is a timely and necessary intervention to protect the employment rights of millions of rural Indians. It reaffirms the government’s commitment to the principle that no willing worker should be denied employment due to administrative hurdles. At the same time, it highlights the complexities of transitioning from a legacy scheme like MGNREGA to a modernised framework like VB-G RAM G. For UPSC aspirants, this episode encapsulates key themes in governance: rights-based entitlements, digital inclusion, federal coordination, and adaptive policy implementation. As India moves towards a “Viksit Bharat” (Developed India), ensuring that no worker is left behind in the digital transition will remain a critical test of inclusive development.
