Budget 2023 | MGNREGS fund cut by 33% to 60,000 crore

Activists accuse the Centre of ‘killing the law’, noting that the allocation does not even meet the minimum threshold and should have been doubled from the current ₹60,000 crore, merely to provide eligible households with 40 days of work instead of the legally guaranteed 100

Updated - February 02, 2023 12:53 am IST

Published - February 01, 2023 06:12 pm IST - NEW DELHI

The Congress general secretary for communications and former Rural Development Minister Jairam Ramesh also expressed dismay at the sharp cut. Image for representation purpose only.

The Congress general secretary for communications and former Rural Development Minister Jairam Ramesh also expressed dismay at the sharp cut. Image for representation purpose only. | Photo Credit: K.K. Mustafah

In line with the recent trend of slashing the budget of its flagship rural jobs scheme, the Union Budget allocated only ₹60,000 crore for the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) scheme for 2023-24. That is 18% lower than the ₹73,000 crore budget estimates for the current year, and 33% lower than the ₹89,000 crore revised estimates for the scheme.

In the last budget presented by Finance Minister Nirmala Sitharaman, the MGNREGA allocation saw a 25% cut to ₹73,000 crore. Left with a spiralling unpaid balance at the end of the year, the Rural Development Ministry had demanded an additional ₹25,000 crore to meet the shortfall in the scheme. The Finance Ministry only approved ₹16,000 crore, taking the revised budget for this financial year to ₹89,000 crore.

Also Read | MGNREGA needs at least ₹2.72 lakh crore for providing 100 days of work, say activists

Despite the higher revised estimates, less than 3% of the households employed under MGNREGA completed the 100 days of work they are legally entitled to. AsThe Hindu reported on January 26, the average days of employment provided per household is at a five-year low in this financial year. Till January 20, the average days of employment provided per household was only 42, while it ranged between 48 and 52 days in the preceding four years.

‘Killing the law’

On the eve of the Union Budget, a consortium of activists and academics working under the umbrella group of Peoples’ Action for Employment Guarantee and the NREGA Sangarsh Morcha had said that, in order to provide the legally guaranteed 100 days of work to all households who have worked in the current year, the scheme required an allocation of ₹2.72 lakh crore. According to their calculations, even giving each active household just 40 days of work would require funding of ₹1.24 lakh crore, more than double the current allocation.

Track Budget 2023 latest updates here

“Such a low allocation is clearly aimed at killing the law. This allocation does not meet even the minimum threshold. And you have to remember that even the revised estimate of ₹89,000 crore is after completely excluding West Bengal, which till the previous years had got 10% of the total MGNREGA budget,” Nikhil Dey, founder of Mazdoor Kisan Shakti Sangathan, said.

‘Brutal surgical strike on the poor’

The Congress general secretary for communications and former Rural Development Minister Jairam Ramesh also expressed dismay at the sharp cut. “Even assuming MGNREGA is demand-driven, the cut is rather savage. But it is in line with the government’s steps to keep demand itself suppressed,” he told The Hindu.

Kerala Rural Development Minister and CPI(M) leader M.B. Rajesh called this “drastic reduction” a “brutal surgical strike on the poor” which reflects the government’s “anti-poor” slant. “The current budget allocation is less than one-fourth of what the country needs to follow the law in letter and spirit. This is the culmination of a systematic effort by the Narendra Modi government to sabotage MGNREGA. They shouldn’t forget that it was MGNREGA that helped in staving off starvation during the pandemic years,” Mr. Rajesh said.

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