MGNREGS runs out of funds; Rural Development Ministry seeks supplementary budget 

An amount of ₹60,000 crore was approved for this financial year, which was 33% lower than the revised estimates for the financial year 2022-23. Six months into the financial year, the job scheme is running a deficit of ₹6,146.93 crore.

Updated - October 06, 2023 10:51 pm IST

Published - October 06, 2023 10:50 pm IST - New Delhi:

Women workers engaged in desilting work as part of Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS). File

Women workers engaged in desilting work as part of Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS). File | Photo Credit: K.R. Deepak

Six months into the financial year, the flagship rural employment programme, the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS), has run out of funds and as per the statistics put out by the Ministry on its website is running a deficit of ₹6,146.93 crore.

An amount of ₹60,000 crore was sanctioned for the scheme for 2023-24, which was 18% lower than the ₹73,000-crore budget estimates and 33% lower than the ₹89,000 crore revised estimates for the financial year 2022-23.

According to informed sources, on September 15, the Ministry of Rural Development (MoRD) had approached the Finance Ministry asking for a supplementary budget of ₹23,000 crore. The sources also confirmed that there is no word from the Finance Ministry yet on the MoRD’s proposal.

Reacting to the criticism from the Opposition parties for the budget cuts, Finance Minister Nirmala Sitharaman had stated that the MGNREGS is a demand-driven scheme and supplementary budget will be made available whenever the need arises.

In a statement on Thursday, the MoRD has reiterated this point. “The Mahatma Gandhi National Rural Employment Guarantee Act [MGNREGA] is a demand-driven wage employment programme and fund release to States/union territories is a continuous process and the Central government is making funds available keeping in view the demand for work.” It further explained the process of release of funds to the States/union territories, which, it said, is on the basis of the agreed “labour budget, opening balance, pending liabilities of the previous year, if any, and the overall performance.” “The Ministry seeks additional funds for the MGNREGS as and when required for meeting the demand for work on the ground,” it further stated.

The Ministry, quoting from statistics till October 4, said that out of the sanctioned ₹60,000 crore, ₹56,105.69 crore, 93.5% of the funds had been released to the States. Though, the Ministry’s statistical report (7.1.1) available on the website shows a deficit of ₹6,146 crore. Several questions texted to Rural Development Secretary Shailesh Kumar Singh went unanswered.

‘Same story’

“This is a story that repeats each year without fail. Every year there are budget cuts and we are told that the MGNREGS is demand-driven scheme and more funds will be released when required. A supplementary budget, usually insufficient, is approved only by the winter session,” said Laavanya Tamang, a researcher with Libtech, a consortium of academics and activists working in the field. This unbreaking cycle adversely impacts the functioning of the scheme while the balance sheets may look alright at the end of the year. “As the available funds dip, the wage dues pile up and the work allocation goes down, bringing the programme to a near halt,” she added.

Between 2021-22 and 2022-23 too, the MGNREGS budget was cut by 25%, forcing the Ministry to ask for an additional ₹25,000 crore to meet the shortfall, but it only got ₹16,000 crore.

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