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Rural budget gets 10% hike, livelihood scheme gets 48% jump in fund

Feb 01, 2021 09:30 PM IST

The budget allocation for the rural development ministry has been hiked to ₹1.32 lakh crore for FY21-22 from ₹1.20 lakh crore in FY 20-21

The Centre continued to pump in more money into rural India with a 10% hike in the rural development ministry’s annual budget for the upcoming financial year, as against the FY20-21 budget estimate. But the allocation fell short by 66,000 crore than the ongoing financial year’s revised estimate, which was astronomically hiked to tackle the Covid-19 pandemic and lockdown of the economy.

The revised estimates for FY 20-21 had gone up to <span class='webrupee'>₹</span>1.97 lakh crore as the government rolled out two stimulus packages to provide jobs and social security during an unprecedented health emergency. (AFP)
The revised estimates for FY 20-21 had gone up to 1.97 lakh crore as the government rolled out two stimulus packages to provide jobs and social security during an unprecedented health emergency. (AFP)

Rural development and defence are the only two ministries getting more than 1 lakh crore in the past few years. The budget allocation for the rural development ministry has been hiked to 1.32 lakh crore for FY21-22 from 1.20 lakh crore in FY 20-21.

The revised estimates for FY 20-21 had gone up to 1.97 lakh crore as the government rolled out two stimulus packages to provide jobs and social security during an unprecedented health emergency.

Rural development secretary NN Sinha said that the budget fits their expectations and with more people going back to cities for jobs, the pressure on MGNREGS will ease. His predecessor, Jugal Kishore Mohapatra, however, said, “The 10% hike in budget is too little as rural livelihood will need much time to return to normal levels.”

Also Read: Budget 2021: Sitharaman’s 2.25k crore infra push for 4 poll-bound states

The national livelihood mission has the sharpest hike of 48% in the FY 21-22 budget vis-à-vis the last year. The livelihood programme has 13,677 crore for FY 21-22, as against 9,210 crore in FY 20-21. The scheme is designed to help the rural poor to increase their household income by means other than agriculture.

A total of 1.12 lakh crore had been earmarked for MGNREGS alone in FY 20-21. Finance minister Nirmala Sitharaman allocated 73,000 crore for FY 21-22— 11,500 crore higher than the last budget even as it is 42,000 crore less than the revised estimate of this year.

Sinha said, “It’s a demand-driven programme and if we can properly utilise it, we can always get additional funds.”

Mohapatra, however, argued that “fund shortage in the middle of the year creates operational difficulties and since every year, the MGNREGS expenses overshoot budget allocations, a higher budget allocation was needed.”

Similarly, the national social assistance programme, that contains pensions for the widow, disabled and elderly and the Annapurna scheme of free foodgrains, received a meagre hike of 4 crore when compared with the budget estimates of FY 20-21 and FY 21-22 . During the pandemic, the government had especially allocated 31,000 crore to give financial assistance to rural women.

The popular Ujjwala Scheme, that gives subsidised cooking gas to rural women has been further expanded. The scheme will now cater to 90 million households as against 80 million households earlier.

For the rural housing scheme, another popular social programme of the Narendra Modi government, allocation remains stuck at 19,500 crore. The other flagship scheme to build rural roads has faced a cut from 19,500 crore in the Union Budget of FY 20-21 to 15,000 crore in FY 21-22. But Sinha said that unutilised fund with states, surplus balance and the new budget will provide a kitty of around 35,000 crore for building rural roads.

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