The Finance Ministry has allocated additional funds of ₹10,000 crore as an interim measure for the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) scheme after it ran out of funds allocated in the budget, according to the Ministry of Rural Development (MoRD). More funds may be forthcoming based on the “assessment of demand,” added the Ministry.
A Ministry spokesperson told The Hindu the extra money was allocated on November 5. However, the scheme’s financial statement on November 25 still reflects a negative net balance of ₹9,888 crore. Despite the additional allocations, the funds available for the scheme stand at ₹76,340 crore, well below the ₹86,229 crore which have been incurred as expenditure, including payments due for wages and materials. The scheme’s balance sheets remain in the red in 24 States and Union Territories.
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Pending wages
“Recently, the Ministry of Finance allocated additional funds of ₹10,000 crore for the Mahatma Gandhi NREGA as an interim measure. Further allocation may be made upon assessment of demand during the revised estimate stage,” said an MoRD statement issued on Thursday. These revised estimates will be included in supplementary budget demands made to Parliament when the winter session opens on Monday.
In the meanwhile, more than ₹1,170 crore worth of wage payments for MGNREGA workers are still pending. “Lack of funds results in suppression of demand for work and delayed payment of wages to workers. These are violations of the Act; they also constrain economic recovery,” said an open letter from more than 70 economists to the Prime Minister on Wednesday, demanding that additional funds be provided immediately to strengthen and expand the scheme. They noted that 13% of households which demanded work had failed to get the same, adding that the unmet demand is as high as 20% in Gujarat, Telangana and Bihar.
In its statement, the MoRD acknowledged that the MGNREGA is a demand-driven scheme, meaning that its funding must increase to accommodate increases in demand. “Whenever, additional funds are required, the Ministry of Finance is requested to provide the funds. In the previous financial year, the Ministry of Finance allocated ₹50,000 crore additional funds for the scheme over and above that of BE [budget estimates],” it said.
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“The Government of India is committed to release funds for wage and material payments for proper implementation of the scheme as per the provisions of the Act and guidelines applicable for the Central Government as well as the State Governments,” it said,
