Centre’s Proposed Increase of Rs 12-14k Crore for MGNREGS This Fiscal

The Centre has sought the approval of the Parliament to spend an additional Rs 14,524 crore on the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) in the current financial year, 2023-24. This is part of the first batch of supplementary demands for grants, which seeks permission to spend a gross Rs 1.29 lakh crore more than what was indicated in the Budget presented by Finance Minister Nirmala Sitharaman on February 1, 2023 .

Why is this increase needed?

The MGNREGS is a flagship scheme of the government that provides 100 days of guaranteed wage employment in a financial year to every rural household whose adult members volunteer to do unskilled manual work. The scheme aims to enhance livelihood security, create durable assets, and reduce rural distress and migration.

The demand for work under the scheme has increased significantly due to the impact of the COVID-19 pandemic, which has affected the livelihoods of millions of rural workers. According to the official data, as of December 5, 2023, a total of 25.61 crore person-days of work has been generated under the scheme, which is 11% higher than the corresponding period of the previous year .

The Centre had allocated Rs 60,000 crore for the MGNREGS for 2023-24 at the budget estimate stage, which was sharply lower than the previous year’s outlay of Rs 89,400 crore. However, this amount was not sufficient to meet the rising demand for work and timely payment of wages. As of August 1, 2023, the Centre owed Rs 6,366 crore under the wage component and Rs 6,266 crore under the material component of the scheme to various States and Union Territories . The delay in payments has adversely affected the implementation of the scheme and the welfare of the workers.

What are the expected benefits of this increase?

The proposed increase of Rs 14,524 crore for the MGNREGS is expected to help in clearing the pending liabilities and ensuring timely payment of wages to the workers. It is also expected to boost the rural economy by providing more employment opportunities and creating productive assets. The increase will also help in meeting the additional demand for work that may arise due to factors such as drought, floods, or natural calamities.

The MGNREGS is widely regarded as a successful social protection programme that has contributed to reducing poverty, enhancing social inclusion, empowering women, and improving environmental sustainability. The increase in allocation for the scheme reflects the commitment of the government to support the rural poor and revive the rural demand in the wake of the pandemic.



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