Interim Budget 2024: MGNREGS bucks trends in poll year as Nirmala Sitharaman retains outlay

The MGNREGS is a demand-driven scheme and the government can allocate additional amounts required at any time through supplementary demands of grants. However, a lower outlay in the general budget sends signals affecting sentiment on the ground. Therefore, a higher allocation in the budget may send positive signals to states and districts, which will be crucial in a poll year. The Lok Sabha elections are due in April-May, two months that see a pickup in MGNREGS demand, which usually peaks in June.

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The higher allocation is in contrast to the recent trend of the government allocating a smaller amount in the budget estimates as compared to the revised estimate of the previous year.

For instance, the Centre allocated Rs 60,000 crore for the MGNREGS in the 2020-21 budget, which was lower than the revised estimate (Rs 71,002 crore) of 2019-20. In 2020-21, the year that saw the outbreak of Covid, the outlay was increased to a record high of Rs 1,11 lakh crore at the revised estimate stage but in the following budget (2021-22), an allocation of Rs 73,000 crore was made. In 2022-23 also, the government kept the allocation at Rs 73,000 crore, which was lower than revised estimate of Rs 98,000 crore for 2021-22. (see chart)

The demand for work under the rural job guarantee scheme is still higher than the pre-pandemic level. The data available on the MGNREGS portal shows that 5.62 crore rural households have availed of the scheme till February 1, 2024, in the current financial year (2022-23), which is higher compared to 5.48 crore in 2019-20 during pre-pandemic times.

Budgetary allocation (Rs crore) for the MGNREGS