Union Budget 2020-21: Total rural budgetary allocation, including MGNREGA slashed

This comes even as rural India is suffering its worst unemployment crisis in 45 years

By Jitendra
Published: Saturday 01 February 2020
Photo: McKay Savage / Flickr

The Union government slashed budgetary allocation for its flagship Mahatma Gandhi National Rural Employment Generation Act (MGNREGA) in the Budget 2020-21, at a time when rural India is facing all sorts of crises including rising food bills and highest unemployment in the last five decades

MGNREGA guarantees at least 100 days of employment to adults of every rural household.

MGNREGA’s budgetary allocation for the current year is just Rs 61,500 crore. The revised estimates for 2019-20 was Rs 71,001.81 crore. The total budgetary allocation last year was Rs 60,000 crore.

“The Indian economy needs higher rural incomes and demand. The government is doing exactly the opposite of that,” Kiran Vissa, a Hyderabad-based farmer activist, said.

The total centrally-sponsored scheme allocation for rural India is Rs 120,147.19, which is less than the revised estimate of the previous year that comes to around Rs 122,649 crore.

India currently has the highest rate of unemployment in the past 45 years and food inflation hit double digits in November 2019, soaring to a 71-month high. The government's own data has pegged the annual growth rate at 5 per cent.

A number of noted economists including 2019 Nobel laureate Abhijeet Banerjee had suggested increasing budgetary allocation to MGNREGA to reboot the economy by boosting demand in rural areas to increase consumption. But the government has ignored this fact yet again with this year’s budget.

A NREGA advocacy group NRGEGA Sangharsh Morcha (NSM) told media before the budget that every financial year, funds of the scheme dry up and around 20 per cent of its budget is used to clear arrears of the previous year.

The budgetary allocation for other schemes such as those on rural road construction, housing as well as the National Livelihood Mission – Ajeevika remained almost static.

The Pradhan Mantri Gramin Sadak Yojana received Rs 19,500 crore in budgetary allocation whereas the revised estimate of 2019-20 shows it received Rs 14,070 crore. The budgetary allocation to the scheme last year was Rs 19,000 crore.

The budgetary allocation for centrally sponsored welfare schemes including those for old age, disability and widows’ pension was either slashed or remain static.

The allocation of Indira Gandhi National Old Age Pension Scheme was 6,259 crore — a deduction by Rs 42 crore from revised estimates. The budgetary allocation for the National Family Benefit Scheme remained the same as the revised estimate of Rs 622 crore.

The budget of the Indira Gandhi National Widow Pension Scheme also remained the same — Rs 1,938.79 crore.

This year, Panchayati Raj allocation was Rs 900 crore, which is a minimal increase from Rs 871 crore in 2019-20. The revised estimation shows that the government has spent only Rs 500 crore.

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