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Home / India News / 45% of central funds for rural jobs, subsidised food spent till July due to Covid-19 crisis

45% of central funds for rural jobs, subsidised food spent till July due to Covid-19 crisis

According to the central government data, till July 2020, around 45% of Rs 1,01,500 crore for NREGA and 44% of 1,15,569 NFSA funds for the current financial year has already been allocated to the states.

india Updated: Aug 08, 2020 17:37 IST
Chetan Chauhan | Edited by Anubha Rohatgi
Chetan Chauhan | Edited by Anubha Rohatgi
Hindustan Times, New Delhi
Labourers working at a MNREGA site in a village in Amethi district of Uttar Pradesh.
Labourers working at a MNREGA site in a village in Amethi district of Uttar Pradesh.(PTI File )

Almost half of the central funds meant for rural employment guarantee scheme and subsidised ration – the two central schemes that have helped to deal with the economic distress due to Covid-19 - have already been spent in the first four months of financial year 2020-21, government data shows.

While the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGA) enabled 90 million households to get work between April and July 2020, subsidised ration under National Food Security Act (NFSA), also called public distribution system (PDS), was provided to an average 720 million people every month during this period.

According to the central government data, till July 2020, around 45% of Rs 1,01,500 crore for NREGA and 44% of 1,15,569 NFSA funds for the current financial year has already been allocated to the states.

The data also pointed out that the demand in these two schemes came down in the month of July after peaking in June, indicating that who had left for villages may be migrating back to cities or moving elsewhere looking for work, as industrial activity has started in and around urban centres.

Under MGNREGA, 24.2 million households were provided work in July as compared to 38.9 million in June (highest ever under the scheme for a month) and 33.1 million in May.

“The employment in July was less because migrant workers returned to cities and labourers got engaged in sowing work that started in July after a good spell of rains,” said Nikhil Dey, former member of NREGA’s Central Advisory Council, and an activist working in rural areas of Rajasthan.

This year, employment provided under the scheme, which guarantees 100 days of work in a year, is almost 50% more than in 2019 and 2018, he said. Also, the number of people provided 100 days of employment during the period is almost three times of the number in 2019.

Himanshu, associate professor in department of labour studies in Jawaharlal Nehru University, who uses only his first name, said NREGA has provided social security to rural poor, for which, it was envisaged, and this is amply clear from the data. “Covid-19 has shown that wages under NREGA has to be realistic as they are very low as compared to minimum wages notified by the state governments,” he said.

Similarly, the disbursement of subsidised ration peaked in the month of June with 94% of the 800 million identified beneficiaries under NFSA getting food grains. In July, the disbursement came down to 91%, which was about seven percentage points less than the number in June and July of 2019.

In terms of food grain disbursed, 28 lakh tonnes of rice and 21 million tonnes of wheat was given to the needy in June, which went down to 24.41 lakh tonnes of rice and 19.91 lakh tonnes of wheat in July. Still, this is about 20% more food grains given to the beneficiaries as compared to June and July 2019, the official data showed.

However, employment generated under NREGA and ration disbursed under NFSA in July was still higher than the pre-lockdown that started on March 24, 2020. The officials expect the off-take to remain high in these two schemes and other rural development programmes till the end of this year.

Financial crunch

The NREGA funds are given to states to pay wages to workers and buy raw material for asset creation. The money, in the form of food subsidy, is given to the Food Corporation of India for supplying grains from its stocks to different states for PDS.

“We are left with very less money under NREGA for the current financial year,” said a rural development ministry official, while briefing the Parliamentary standing committee on labour on Friday. At this pace, the official said, the NREGA funds would be exhausted by early December.

He, however, added that as NREGA is a demand driven scheme, the Central government has to pay to the states and the finance ministry has assured that there would be no shortage of funds.

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