Union Budget 2024-25: No respite for rural employment as MGNREGS allocation unchanged from 2023-24

Of the Rs 86,000 crore allotted under the interim budget, only Rs 54,000 crore will be available for utilisation for financial year 2024-25

By Himanshu Nitnaware
Published: Thursday 01 February 2024
Representative photo. Credit: Supriya Singh / CSE

The Union government allocated Rs 86,000 crore for the country’s guaranteed wage employment scheme in the interim budget for 2024-25, a significant rise from the allocation announced for 2023-24. However, it has failed to provide adequate respite to rural employment, said experts.

During the budget speech for 2023-24, Union Minister of Finance Nirmala Sitharaman allocated Rs 60,000 crore for the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS), which entitles workers in registered rural households to guaranteed employment for 100 days. This was the lowest in six years. However, revised estimates show the total expenditure had increased to Rs 86,000 crore, which matches the allocation for the interim budget for the upcoming financial year.

Moreover, the revised estimates show that total expenditure under MGNREGS for 2023-24, including payment dues, stands at Rs 99,514 crore. Unpaid dues alone add up to more than Rs 11,000 crore. This means the scheme has a net deficit of Rs 16,656 crore, with more than 100 per cent of the allocated funds already utilised.

In the runup to the interim budget, Apurva Gupta of NREGA Sangharsh Morcha, a coalition of organisations working with rural workers, said that considering the employment trend in 2023-24 (which has still two months to go), the next financial year will have almost Rs 32,000 crore in pending dues carried forward.

Considering the calculations, of the Rs 86,000 crore allotted, only Rs 54,000 crore will be available for utilisation in 2024-25.

Support needed for rural employment

“The budget for rural employment has been announced keeping the general elections in mind. It seems to have increased, but given the pending liabilities and wages, the money continues to be lesser than needed,” said Nikhil Dey, a social activist with Mazdoor Kisan Shakti Sangathan, a non-governmental organisation that works for the rights of rural workers.

Dey pointed out that MGNREGS is the only rural employment programme in the country, which supports 140 million workers. Allocations in the 2023-24 budget could have generated average employment of about 16 days per household.

However, according to the data available on the Union Ministry of Rural Development’s Management Information System (MIS), only 2 per cent of the households covered under the scheme have managed to complete 100 days of work, and a majority of the workers were able to gain average employment for less than 50 days.

“MGNREGA can be a major contributor for the nation’s economic growth. But for this, budget allocations have to be in proportion,” he said, adding that the severely low allocations push the rural economy in economic distress.

The activist said that the scheme should be allocated at least Rs 2 lakh crore, which is equal to 1 per cent of India’s Gross Domestic Product (GDP). “This allocation would serve to clear the pending wages and still provide employment for all registered rural households for 25 days,” he said.

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