MGNREGS allocation reduces by 33% to 60,000 crore in Union Budget

Feb 02, 2023 03:10 AM IST

An official justified the lower outlay for the flagship rural scheme, saying the number of people demanding work under MGNREGS was trending around pre-pandemic levels between July and November 2022

The Centre’s flagship job guarantee programme MGNREGS has seen a 33% cut in outlay from its revised estimate of 89,400 crore in the current fiscal year to 60,000 crore in the budgetary allocation for FY23-24, Budget documents showed.

The Centre shelled out <span class='webrupee'>₹</span>1.10 lakh crore and <span class='webrupee'>₹</span>97,000 crore in the pandemic-hit FY2021 and FY2022 respectively before demand started to wane as the economy opened up. (PTI File)
The Centre shelled out 1.10 lakh crore and 97,000 crore in the pandemic-hit FY2021 and FY2022 respectively before demand started to wane as the economy opened up. (PTI File)

Officials maintained that in the demand-driven programme, further funds will be provided as required. An amount of 60,000 crore was last allocated to MGNREGS in Budget 2019-20. In Budget 2022-23, 73,000 crore was allocated to the scheme. Compared to the current fiscal’s budget estimate, MGNREGS got a 19% lower allocation.

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Of the five key welfare schemes of the rural development ministry, the National Social Assistance Programme (NSAP) has been marginally reduced, the rural road scheme retains the same budget and the livelihood programme got a marginal hike. The rural housing scheme received a 12% hike.

Justifying the lower outlay for the flagship rural scheme, an official pointed out that the Economic Survey released on Tuesday showed that job demand is at the pre-pandemic level.

“The number of persons demanding work under MGNREGS was seen to be trending around pre-pandemic levels from July to November 2022. This could be attributed to the normalisation of the rural economy due to strong agricultural growth and a swift recovery from the Covid-induced slowdown, culminating in better employment opportunities,” the Survey said.

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In the pandemic-hit FY2021 and FY2022, the Centre had to shell out 1.10 lakh crore and 97,000 crore before the demand started to wane as the economy opened up.

Former rural development secretary Jugal Kishore Mahapatra said the lower allocation will have a dampening effect on the scheme. “The standard reply of the government is that it is a demand-driven programme and more money will come if needed. But if the initial allocation is muted, it will have an adverse effect on the implementing agencies at the ground level. This has happened to the scheme for many years. More money is required for smooth implementation. If workers fear wages would be delayed, they will not turn up. The allocation will have a demand dampening effect,” Mahapatra said.

The lower allocation comes when the government is trying to skew the scheme to put more money in poorer states. In a December 2022 meeting, the PM was said to have argued that the programme was aimed at poverty alleviation but the poorer states were not getting the required share of MGNREGS funds.

An official, however, said that the lower budget of the scheme will be compensated by the higher allocation in the PMAY budget. “In PMAY, 90 days of MGNREGS work is allowed to build a house. The government still needs to build about 8 million houses. A large number of MGNREGS workers will find a job in building rural houses,” he said.

The government, however, expanded the scope of MGNREGS in its new afforestation scheme. “Building on India’s success in afforestation, ‘Mangrove Initiative for Shoreline Habitats & Tangible Incomes’, MISHTI, will be taken up for mangrove plantation along the coastline and on salt pan lands, wherever feasible, through convergence between MGNREGS, CAMPA Fund and other sources,” finance minister Nirmala Sitharaman said while presenting the Budget.

CPI(M) leader Sitaram Yechury criticised the move and tweeted, “When the unemployment rate is at a historic high the budget reduces the MGNREGS allocation by 33 per cent. Food subsidy is cut by Rs. 90,000 crore. Fertilizer subsidy by 50,000 crore and petroleum subsidy by 6,900 crore.”

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