Introduction
The government is likely to allocate around Rs 90,000 crore for the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) in the Budget estimate (BE) for 2024-25, an increase of 50% over 2023-24 BE, in a strong signal to the poor ahead of approaching general elections.
Background
MGNREGS is a flagship scheme that provides at least 100 days of guaranteed wage employment in a financial year to every household in rural areas of the country, whose adult members volunteer to do unskilled manual work. The scheme is intended to provide income support and livelihood security to the rural poor, especially women, Scheduled Castes, Scheduled Tribes and other vulnerable groups.
Current Situation
The government had provided a five-year-low provision of Rs 60,000 crore in the FY24BE for the jobs programme, citing rampant misappropriation of funds under the scheme. However, due to high demand for workdays amid the Covid-19 pandemic and its aftermath, the government had to provide an extra allocation of Rs 16,143 crore in the first supplementary demand for grants in early December 2023. It is likely to provide another Rs 12,000 crore for the flagship Scheme in the revised estimate for the current fiscal in the Budget on February 1, taking the total outlay to around Rs 88,000 crore.
Challenges and Initiatives
The government faces several challenges in implementing MGNREGS effectively and efficiently, such as delay in wage payments, poor quality of assets created, lack of convergence with other schemes, and corruption and leakages. The government has taken various initiatives to address these issues, such as making Aadhaar-Based Payment System (ABPS) mandatory for payment of wages from January 1, 2024, stopping disbursement of funds to West Bengal due to corruption allegations, and enhancing social audit and grievance redressal mechanisms.
Conclusion
The government’s decision to increase the outlay for MGNREGS by 50% in the interim budget reflects its commitment to support the rural poor and women, who have been hit hard by the Covid-19 crisis. The scheme has also been instrumental in creating durable assets and improving rural infrastructure. However, the government needs to ensure that the funds are utilised effectively and transparently, and that the scheme is aligned with other development programmes to maximise its impact.