Karnataka govt mulling corpus to keep rural job scheme alive

With the Centre repeatedly defaulting on Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) payments, the state government is mulling the creation of a contingency fund to pay bills and keep the employment scheme going.

For the financial year 2019-20, the Centre owes the state Rs 1,692 crore for wages, material costs and backlog dues. Whenever there has been a delay, the state government has been paying from its own pocket, pending the Centre’s reimbursement.

Speaking to DH, Rural Development and Panchyat Raj (RDPR) Principal Secretary L K Atheeq said, “While the state government has been making advance payments from time to time by utilising its own funds, there has been no official sum set aside for this purpose until now. A pool of about Rs 500 crore would prove useful when there is delay in the fund release by the Centre. Instead of seeking the government’s intervention every time, this amount would be readily available to lend for the implementation of the programme.”

The issue was also discussed in the Legislative Assembly with Bagepalli legislator S N Subbareddy suggesting the government to emulate Andhra Pradesh in making use of ‘State Convergence Fund’ to pay the MNREGA bills.

Responding to the same, RDPR Minister K S Eshwarappa said the government would seek details of the same from the neighbouring state and discuss it with the Finance department.

“The government can make use of a portion of the MLA funds, to ensure adequate money for the scheme. The Andhra Pradesh government has seen success by converging funds for this purpose,” Subbareddy told DH.

According to government data, the state government had made advance payments to the tune of Rs 3,513.32 crore between 2015-16 and 2019-20, of which the Centre is yet to credit Rs 394.86 crore. Overall, including the pending dues for the previous advances, and the wages, material and administration costs of financial year 2019-20, the Centre has to credit Rs 1,692 crore to the state government.

As per regulations, the Centre pays the entire wage amount, while it pays 75% of the material costs, leaving the rest to be filled in by state governments. Under MNREGA, unskilled labourers are provided job for 100 days in a year. Karnataka has extended this to 150 days on account of floods, according to officials.