Union Budget 2023: MGNREGA allocation down by nearly 32%, activists rue cut

It is the second straight cut in the scheme's budgetary allocation, as in the 2022-23 budget also, the MGNREGA's budgetary allocation had been cut by 25%

Prime Minister Narendra Modi’s government has proposed to drastically cut the allocation for the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) in Budget 2023-24 – bringing it down by over 32% from the revised estimate for the programme in the current financial year.

The overall allocation for the Ministry of Rural Development for the coming financial year has been proposed to be slashed by about 13% from the Budget Estimate of Rs 135,944 crore in 2022-23 to Rs 157, 545 crore. The revised estimate for the ministry in the current financial year has gone up to Rs 181,121 crore.

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Finance Minister Nirmala Sitharaman has proposed to earmark only Rs 60000 crore for implementing the rural job scheme in 2023-24. The allocation for the rural job scheme for the next financial year is 17.80% lower than the budgetary estimate of Rs 73000 crore for 2022-23. The cut is even sharper – around 32.88% – if the allocation is compared with the revised estimate of Rs 89400 crore for the current financial year.

The government moved to cut the allocation for the MGNREGS to 2019-20 level, even as a recent study by the Azim Premji University found that the scheme provided a safety net for the rural population during the pandemic, compensating for up to 80% income loss caused by shutdowns imposed to contain the Covid-19.

“The budget dealt a body blow to the MGNREGS,” Nikhil Dey of the NREGA Sangharsh Morcha said. “The government has clearly indicated that it wants to do away with the scheme,” the eminent social activist told DH.

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The government proposed to slash the budgetary allocation for the MGNREGS even as the rural employment rate stood at 6.5% on January 31, 2023.

The MGNREGS – mandated by Mahatma Gandhi National Rural Employment Guarantee Act – is a demand-driven programme designed to guarantee at least 100 days of wage employment in a financial year to every rural household having adults ready to do unskilled manual work.

The scheme was launched on February 2, 2006 and was often highlighted by the erstwhile United Progressive Alliance (UPA) Government as a programme, which legally guaranteed minimum livelihood security to rural population, contributed to bringing up rural wages, lessened distress migration and empowered weaker sections.

The Congress and some other opposition parties have been criticizing the government led by the Bharatiya Janata Party (BJP) for weakening the scheme.

Nearly 6.49 crore households so far demanded work under the MGNREGS in 2022-23, while 6.48 crore was offered the same and 5.76 crore of them availed it.

The People’s Action for Employment Guarantee (PAEG), a group of academicians and activists studying implementation of the MGNREGS, pointed out that only 3% of the beneficiaries – around 16 lakh households – had completed 100 days of work in 2022-23. A report by the group suggested that the scheme would need an allocation of about 2.72 lakh crore in 2023-24 to provide legally guaranteed 100 days of work to every household that was fully or partially benefited in the current financial year.

The allocation for Pradhan Mantri Awas Yojna (PMAY)- Rural has been proposed to be increased to Rs 54,487 crore in 2023-24, compared to Rs 48,422 crore in the revised estimates for 2022-23. The allocation for Pradhan Mantri Gram Sadak Yojna was same as the last budget at Rs 19,000 crore, while the allocation for National Livelihood Mission - Ajeevika has increased marginally to Rs 14,129.17 crore, compared to revised estimate of Rs 13,336.42 crore in the last budget.