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India's new funding law boosts most states' allocations, with top gains for UP, Maharashtra, and others, while expanding rural job guarantees.
The VB-G RAM G Act, passed by India’s Parliament and signed into law on December 21, 2025, is projected to deliver Indian states a net gain of approximately ₹17,000 crore compared to their average allocations over the past seven years, according to a State Bank of India report.
The new 60:40 central-state funding ratio, excluding certain states, is expected to benefit most states, with only two showing minor losses—Tamil Nadu’s loss becoming negligible when adjusting for an outlier year.
Uttar Pradesh, Maharashtra, Bihar, Chhattisgarh, and Gujarat are projected as top gainers.
The framework, based on seven equity and efficiency criteria, aims to improve fund distribution and supports expanded rural employment guarantees from 100 to 125 days per household.
La nueva ley de financiación de la India aumenta las asignaciones de la mayoría de los estados, con las mayores ganancias para UP, Maharashtra y otros, al tiempo que expande las garantías de empleo rural.