Govt to slash budget for MGNREGS by 25% to Rs 73,000 crore

The allocation for Pradhan Mantri Gram Sadak Yojana, the rural road construction scheme, however, was proposed to be raised to Rs 19,000 crore

The Government on Tuesday proposed to reduce the amount allotted for implementing the rural job scheme in 2022-23 by almost 25.5 per cent to Rs 73,000 crore.

Though civil society organizations have been demanding a substantial hike in allocation for the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS), Prime Minister Narendra Modi’s government kept the allocation for the programme at the same level as that of the Budget Estimate of 2021-22.

The total proposed allocation for all the centrally sponsored schemes run by the Ministry of Rural Development (MoRD) was slashed by about 11 per cent to Rs 1,35,944.29 crore from the 2021-22 Revised Estimate of Rs 1,53,558.07 crore.

The allocation for Pradhan Mantri Gram Sadak Yojana, the rural road construction scheme, however, was proposed to be raised from Rs 14,000 crore in Revised Estimate of 2021-22 to Rs 19,000 crore in 2022-23.

The government had actually spent Rs 1.12 lakh crore for MGNREGS in 2020-21, when the scheme had proven to be extremely useful in generating livelihood opportunities for migrant workers who had returned from the cities to their villages in the wake of the lockdown that had been imposed to contain the Covid-19 pandemic.

Finance Minister Nirmala Sitharaman had however proposed an allocation of only Rs 73,000 crore for implementing the MGNREGS while presenting the Union Budget for 2021-22. But the government then raised the allocation to Rs 98,000 crore in the Revised Estimate for the year.

Notwithstanding the substantial rise in the Revised Estimate for 2021-22, the Finance Minister proposed an allocation of Rs 73,000 crore while presenting the Union Budget for FY23.

The MGNREGS – mandated by Mahatma Gandhi National Rural Employment Guarantee Act – is 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.

Civil society organizations have been demanding a substantial hike in the allocation for the MGNREGS and pointed out that meagre allocations for the scheme in the past had resulted in drying up of funds from the third quarter of every financial year. This resulted in slowdown in the implementation of the works under the scheme and excessive delays in payment of wages.

The People's Action for Employment Guarantee estimated that at least Rs 2.64 lakh crore would be required to provide employment for 100 days for the same number of households, that had benefited from the scheme in 2021-22. A study by the NREGA Sangarsh Morcha showed that Rs 3.63 lakh crore would be required to give 100 days of employment for all households with active job cards.

The Jan Sarokar, a group of civil society organizations, pointed out that about 20 per cent of the MGNREGS budget was used to clear arrears every year. Within the first half of 2021-22, no money for implementation of the scheme was left in the coffers and 21 states showed a negative net balance.

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