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The Union Budget 2024-25 did not see any increase in allocation of the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) budget.
The budget allocation of Rs 86,000 crore announced in the interim budget in February 2024 remains unchanged in the budget announced by Finance Minister Nirmala Sitharaman on July 23, 2024
The budget allocation remains unchanged from 2023, which experts believe is insufficient. They also claimed that the central government's analysis in its Economic Survey 2024-25, which concluded that fund utilisation and employment generation are not proportional to poverty levels, is inaccurate.
“In comparison to the government's budget allocation of Rs 86,000 crore for the scheme, expenditure on the demand-driven programme was nearly Rs 1.2 lakh crore,” said Rajendran Narayanan, faculty at Azim Premji University and researcher at LibTech India.
The same budget allocation as last year indicates that the government is promoting a narrative of low budget allocation on the flagship scheme that provides rural employment to the masses, Narayanan said.
According to the government’s data, 44 percent of the Rs 86,000 crore allotted to MGNREGA in the 2024-25 final budget has already been spent, said Laavanya Tamang, senior research associate at Foundation for Responsive Governance, who is affiliated with NREGA Sangharsh Morcha.
While the actual expenditure stands at Rs 37,761 crore, the expenditure including current pending dues amounts to Rs 41,519 crore as of July 23.
“If the expenditure trend continues, the funds are likely to be exhausted by October, with eight months remaining in the fiscal year,” Tamang said.
The current financial situation of a constrained budget is a trend that has been observed in MGNREGS in recent years and it is likely to result in reduced work generation in the latter part of the fiscal year, she added.
Commenting on the government's analysis in the Economic Survey 2023-24, Nikhil Dey, founding member of Mazdoor Kisan Shakti Sanghathan (MKSS), which works for the rights of MGNREGS workers, said, “It is the first time that the scheme has not even been mentioned in the fiscal budget speech. If additional funds are not allocated, they may be depleted before the halfway point of the year.”
The government's correlation analysis is poor, indicating a lack of understanding of rural India's needs and demands, Dey said. “Though it is encouraging that states such as Kerala and Tamil Nadu are generating demand, the inability of poor states such as Uttar Pradesh and Bihar to use funds demonstrates how limited supply is,” he said.
Citing data from the MGNREGS management information system, the central government stated that during the fiscal year 2023-24, Tamil Nadu, which has less than a per cent of the country’s poor population, accounted for approximately 15 per cent of the total funds allotted for the scheme.
It also stated that Kerala, which has only 0.1 per cent of the country’s poor population, spent approximately 4 per cent of MGNREGS funds. In contrast, 45 per cent of the poor population in Bihar and Uttar Pradesh used only 11 per cent of the funds.
The report stated, “The correlation coefficient between state-wise multidimensional poverty index and person-days generated is calculated to be only 0.3, indicating that MGNREGS fund usage and employment generation are not proportional to poverty levels.”
Dey added that the government should increase the supply of funds, which will boost demand and benefit the poor rural population. “The numbers show how demand is being suppressed for the distressed population and reflect the government's failure to effectively implement the scheme,” he said.
Narayanan said the scheme’s implementation staff is inadequate. “Constrained funds, combined with insufficient staff, have resulted in programme implementation suffering in a variety of ways, including an increase in corruption. This further discourages workers from seeking work under MGNREGS,” he added.
