Despite the recent revival, there is crisis looming for Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGA) as the Rural Development Ministry has exhausted more than 95 per cent of its budget provision for the scheme. The fund squeeze has forced Rural Development Minister Birender Singh to write to Finance minister Arun Jaitley, asking him to immediately release the Rs 5,000 crore promised by him for the programme.
Twelve states presently show a negative balance with long overdue unpaid wages, threatening the continuation of the scheme. These states are Andhra Pradesh, Assam, Chhattisgarh, Haryana, Himachal Pradesh, Kerala, Meghalaya, Nagaland, Odisha, Punjab, Sikkim and Uttar Pradesh.
The letter, dated December 31, 2015, states that of the budget provision of Rs 34,699 crore made for implementing MGNREGA in 2015-16, the ministry has released Rs 33,448 crore to states. States, on their part, have spent 95 per cent of the amount. The letter, accessed by Mazdoor Kisan Shakti Sangathan under RTI Act, points to the fact that owing to agrarian distress, demand for wage employment has been high this year. “We are receiving a number of requests from the states for release of funds to liquidate the pending liabilities and for smooth implementation of MGNREGA during the fourth quarter of the current financial year,” writes Singh.
Singh’s letter is a follow-up to a previous letter written by rural development secretary J K Mohapatra to finance secretary Ratan P Watal on the same issue.
Recent demand surge and timely release of funds over the last few months has led to the last two quarters registering a five-year high in person-days of employment. Singh’s letter also says that the ministry is anticipating 66 crore more person-days to be generated in the last quarter, the funding requirement for which is assessed at Rs 6300 crore.
“Never before has there been such dictatorship of finance ministry in the social sector. The budget cut has affected education, health, ICDS and food security. NREGA has survived so far because it is based on a law and the finance minister cannot override it. There are 1.82 crore workers on muster rolls in the states that show a negative balance,” said Nikhil Dey from MKSS. Social Activist Aruna Roy added that with the rabi harvest around the corner, if the funds are not released immediately, the crisis would worsen. Last year, Jaitley had promised to infuse Rs 5,000 crore to the scheme in case of tax buoyancy.
Economist Jayati Ghosh said there is no need to link tax collection to the programme. “There has been a systematic starving of resources of the state government who are deliberately not registering new workers due to lack of funds. This has serious implications not only for rural citizens but also from the macro-economic perspective. Even the corporate sector is demanding proper implementation of NREGA since they know that unless you revive the rural economy, there is no demand,” said Jayati Ghosh, professor of economics at JNU.