The highlight of the rural emphasis of his budget, stressed finance minister Arun Jaitley, is ‘the highest ever allocation for MGNREGA’. This year’s provision is Rs 48,000 crore, as against Rs 38,500 crore in 2016-17, he said. The speech made no mention of the fact that the revised budgetary allocation for the scheme in 2016-17 was Rs 47,500 crore, which too was way below what was actually demanded by the Ministry of Rural Development in the last two supplementary grants. This effectively amounts to a mere 1 per cent increase as opposed to the increase of 25 per cent that is being projected.
In fact, the existing funds crunch seems to be hitting MGNREGA work generation on ground as the data for January shows a steep decline as compared to December and also as compared to the corresponding month in the last two years. The total person days generation of work under MGNREGA in January 2017 was only 5.94 crore as compared to 10 crore in December 2016 and 28 crore and 10 crore in January 2016 and January 2015 respectively.
The Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGA), which provides 100 days of wage employment in rural India, is a demand-driven scheme which means that the government has to provide for work whenever there is a demand without putting any budgetary constraints. This demand is at its peak during times of rural distress. Owing to the increased take-up of work due to drought-like conditions in April to June 2016, the rural development ministry had made a demand for Rs 15,000 crore over the last two supplementary grants. As against this, the finance ministry sanctioned only Rs 9000 crore. Presently about 93 percent of the total allocation has already been spent, due to the pre-monsoon drought and again in December owing to the reverse migration triggered by loss of jobs post-demonetisation.
IIT Delhi economist Reetika Khera said that the dip in January is worrying as it shows that either work generation is not keeping up with demand or data entry is being delayed on account of a severe delay in wage payments .”Once we factor in inflation to look at the change in real terms, that there is hardly any increase over the previous year’s revised estimates. The allocation to NREGA in this budget is woefully disappointing as it remains inadequate in comparison to demand. There have widespread reports of job losses in the informal sector due to demonetisation and many people are turning to NREGA to tide over these bad times,” said Khera.
Rural ministry officials attributed the dip in MGNREGA January figures to the fact that rural labour is also being employed in the rural road and housing construction schemes that have picked up pace. “Also, 2015-16 being a drought year, we had an arrears of Rs 12500 crore that was disbursed from the 2016-17 budget. This year, the arrears would not be more than 3000 crore. Hence the MGNREGA allocation is sufficient,”said the official.
Mazdoor Kisan Shakti Sangathan activist Nikhil Dey, however, pointed out that considering that the ministry has exhausted much of its money for this year, even going by the labour budget for the remaining two months and the current arrears, the financial year will end with pending liabilities of Rs 13,000 crore at least.
“This is without even factoring in the increased work demand post-demonetisation and drought conditions in Tamil Nadu which is one of the highest MGNREGA spending states. The work demand is expected to go up significantly in February and March as even traditionally these are among the peak seasons. Already, 22 out of 34 States have negative balances and 54 per cent. of the wage payments continue to be delayed,” said Nikhil Dey who said that the allocation for the coming year has failed to match up to that of 2016-17 even in real terms.