Budget for rural employment guarantee scheme, MGNREGS, brutally slashed
Despite MGNREGS being a demand-driven scheme, the allocation of funds has not been able to keep up with the increased demand for work. During the peak of the COVID-19 pandemic in 2020-21 and 2021-22, revised estimates for the scheme were 81 per cent and 31 per cent higher than budget estimates for the corresponding years. However, for the financial year 2023-24, the allocation for MGNREGS has decreased 33% from the previous year's revised estimates.
Pratibha Singh 9 Feb 2023 11:37 AM GMT
Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) is a flagship programme of the Indian government aimed at “controlling distress migration” through providing at least 100 days of guaranteed employment to rural households. The government bears the full cost of unskilled labour and 75 per cent of the material cost, with funds released by the government to the State Employment Guarantee Fund.
To further protect the labour rights, the ratio between labour and material cost is fixed to 60:40. However, Rs 60,000 crores of allocation for the year 2023-2024 in the recent Budget, i.e., 28 per cent decrease since last year’s expenditure should be an alarming concern.
The budget crunch not only hits wage employment badly but affects the way rural India perceives the scheme. With every shift in the implementation of MGNREGA, naysayers under local political influence may propagate a disheartening narrative to the easily swayed rural workers. Since the days of pandemic, with timely wage payments and efforts from different stakeholders, there has been a significant change in the rural mindset but the budgetary cut is sure to hurt their opinion again.
There are already pending liabilities of Rs 9,570 crores while the government has only Rs 1,833 crore available balance. It is apprehensive whether the reduced budget can fulfil the aspirations of frontline MGNREGS workers and grassroots development professionals working painstakingly to sway the opinion of people around MGNREGS by collaborating with different stakeholders. Years of effort were required just to set the tone right and this budget cut now comes to them as a setback.
MGNREGS, the only de-commodified scheme, has proved its importance and relevance during COVID times but the present government is still sceptical. The scheme is not comparable to any other schemes. The beauty which attracts marginalised communities, specifically women, is it gives the control over the money received through DBT (direct benefit transfer) in women/ labour accounts thus empowering them.
I remember one of the women from the fields of Madhya Pradesh who said, “I work under MGNREGA because it is my money. I don’t need to ask for my students’ studies and for my daily expenses to my in-laws or my husband”. Despite issues in implementation and delay in payments these people and their hopes are still alive.
Despite MGNREGS being a demand-driven scheme, the allocation of funds has not been able to keep up with the increased demand for work. During the peak of the COVID-19 pandemic in 2020-21 and 2021-22, revised estimates for the scheme were 81 per cent and 31 per cent higher than budget estimates for the corresponding years. However, for the financial year 2023-24, the allocation for MGNREGS has decreased 33 per cent from the previous year's revised estimates which was Rs 89,400.
The MGNREGS fund release is based on both labour budget estimates and actual demand of work. Despite high fund release by the government in 2020-21 and 2021-22, the utilization of funds had exceeded available funds, with 20 out of 28 states spending more than their available funds. But still the government is acting blind to these trends which further raises questions on government’s accountability.
Furthermore, the allocation of funds has been unequal, with fiscally stronger states receiving a higher share of releases. For example, Tamil Nadu and Andhra Pradesh have received 11 per cent and 9 per cent of the releases from the government, while states like Bihar, Jharkhand, and West Bengal received much less. On top of this, West Bengal has zero approved labour budget despite Rs 3,050 lakhs of wages owed to workers as of February 2, 2023.
It is clear that the budget slash for MGNREGS will have significant consequences for 15 crores active rural workers coming from women, minors, tribals, marginalised groups who rely on the programme for guaranteed employment. The unequal allocation of funds further exacerbates the issue, with some states left without proper funding to provide employment to those in need. The government must take action to ensure that the MGNREGS programme continues to be funded adequately and fairly, to provide a lifeline and keep the rural household’s faith intact in this programme.
In conclusion, the budget slash for MGNREGS seems to be a purposeful act that will strangle the programme and hurt rural households who rely on the scheme for employment. It is imperative that the government takes action to restore funding for the programme and ensure that it is properly and fairly allocated to all states. The MGNREGS programme is a vital tool for supporting the rural economy and must be protected.
Pratibha Singh is a grassroot professional who has worked in rural tribal Madhya Pradesh. She has an experience of five years working in the intersection of governance and livelihood.