The Centre has so far released Rs 56,994 crore or 95% of the Budget estimate of Rs 60,000 crore for MNREGS in FY24.
With 95% of the Budget allocation for the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) having already been utilised so far in the current fiscal, the Centre will likely provide an additional Rs 30,000-40,000 crore for the flagship scheme soon, sources said.
Simultaneously, the government will also try and plug leakages in the scheme, given the instances of misappropriation being reported.
Approval for the extra allocation would be sought in the first Supplementary Demand for Grants to be presented in the winter session of Parliament in December. In the interim, the government will ensure fund flows to run the scheme smoothly without disruptions, the sources said.
The Centre has so far released Rs 56,994 crore or 95% of the Budget estimate of Rs 60,000 crore for MNREGS in FY24.
As against the funds availability of Rs 67,403 crore (including some write-back of funds from the previous year) as of October 15 of the current fiscal, the expenditure stood at `66,704 crore or 99% of the available funds.
Given that five-and-half months are left in the year, the Budget expenditure on the scheme may reach Rs 90,000 to Rs 1 trillion as the person-days generated (work provided) under the scheme may be around 3 billion,” an official said.
However, the extra allocation for the scheme won’t impact the fiscal deficit as it could be adjusted against savings in other schemes expected for the year.
So far in FY24, 1.93 billion person days of work have been generated under the scheme. In FY23, 2.94 billion person days were generated compared to 3.63 billion in FY22 and a record 3.89 billion in FY21, the pandemic year.
According to official data, month-wise work demand has moderated from 33.7 million in June to 18.5 million in September 2023, indicating that people are finding other viable options for gainful employment.
Besides person days expected, the average wage increase could also inflate expenditure to some extent even though the Centre is tightening measures to plug leakages in the scheme.
Under MGNREGS, the average wage rate per day per person has been on the rise due to minimum wage revisions by states. The average wage stood at Rs 237.96 so far in FY24 from Rs 217.9 in FY23, Rs 208.84 in FY22, Rs 200.71 in FY21 and Rs 182.09 in FY20.
Rampant misappropriation of funds allocated under the flagship scheme is one of the main triggers for the Centre to make a five-year low provision of Rs 60,000 crore in the FY24 Budget for the jobs programme.
The Centre has even stopped MNREGS fund flows to West Bengal since December 2021 due to allegations of corruption, including no trace of work after their competition, existing works fraudulently shown as MGNREGS works etc.
Niti Aayog member Ramesh Chand recently told FE that work demand under MNREGS is no indicator of distress and cited reports which said much of the work is being done through machines in violation of the scheme.
“Even though there is no rural distress, the government will provide an adequate budget to keep the workflow in H2Y24. There are some state elections next month also,” another official said.
According to data from the Centre for Monitoring the Indian Economy, the rural unemployment rate in July declined to 7.89% from 8.73% in June, whereas urban unemployment rose to 8.06% from 7.87% in the same period.
MGNREGS is a scheme under the ministry of rural development, that aims at providing at least 100 days of guaranteed wage employment in a financial year to every household in rural areas of the country, whose adult members volunteer to do unskilled manual work.
Source:financialexpress.com