MGNREGA scheme faces fund crunch

The Mahatma Gandhi National Rural Employment Guarantee Act scheme is facing a severe fund crunch, with 99% of money allocated already exhausted three months before the end of the financial year, and 11 States and Union Territories having a negative net balance.

Studies analysing government data show that the scheme faces difficulties in meeting the demand for work and paying wages on time. These issues are likely to be exacerbated by the current fund crisis, according to worried economists, researchers and workers on the ground.

Lean season

The scheme’s financial statement shows that as on Saturday, the total availability of funds was ₹59,032 crore. The total expenditure, including payment due, stands at ₹58,701 crore. That leaves a slim margin of only ₹331 crore. For 11 States, that margin is non-existent, as their accounts are already in the red.

“There are three more months to go and this is when the lean agricultural season is upon us, when demand for MGNREGA employment peaks, intensifying the suffering at a time when work is needed most,” said Nikhil Dey, an activist with the Mazdoor Kisan Shakti Sangathan. “Rainfall deficits and drought this year are likely to worsen the situation, as we saw in 2015-16 when the demand and need for work was higher than normal.”

A team of independent researchers led by Azim Premji University’s Rajendran Narayanan has found that employment provided was already 32% lower than work demanded during 2017-18. Their ongoing study is analysing government data on the demand generated, employment provided, and fund availability in 3,500 panchayats across 10 representative States last year.

In monetary terms, using this data to estimate national allocation, this means that ₹76,131 crore is the minimum amount needed to meet the registered work demand last year, almost 30% higher than the current allocation, said the study.

“This shows that the employment provided is wilfully capped based on the funds available. On the ground, we are seeing that State governments and field functionaries are compelled not to register demand for work in order to contain the payment liabilities of the governments,” said Mr. Dey.

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Printable version | Sep 18, 2020 2:00:50 AM |

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