The finance ministry, which had allotted Rs 38,500 crore in its 2016-17 Budget for the scheme, is set to concede to much of the Ministry of Rural Development’s (MoRD) demand for another Rs 15,000 crore. MoRD — the nodal ministry for MGNREGA— had sought Rs 15,000 crore via the first batch of supplementary demands for grants to meet the increasing demand for the scheme owing to the drought.
“We have decided to approve around three-fourth of the total amount sought by the rural development ministry …,” a senior finance ministry official said.
The first supplementary demands for grants may be tabled in the third week of the ongoing session of Parliament. The first batch of supplementary demands for grants will also provide more funds for Department of Telecommunications’ BharatNet project.
The finance ministry had in June invited proposals from all ministries for the minimum necessary amount required by them after a review of savings. Many other ministries including Ministry of Road Transport and Highways had sent proposals for the first batch of the supplementary demands for grants, the officials said.
“The ministries are in need for more funds with higher expenditure on implementation of projects in the first quarter of this fiscal. That’s why we have got higher demands for funds from ministries,” one of the officials said.
According to data of the Controller General of Accounts, plan expenditure in April-May, the first two months of this financial year, rose sharply by 46 per cent to Rs 90,570 crore.
With a gradual acknowledgement in the government of the scheme’s importance as a major source of rural income especially during drought, finance ministry’s willingness to release much of the amount demanded by MoRD is in sharp contrast to its earliest tight-fistedness.
During last year’s Budget session, Prime Minister Modi had criticized MGNREGA and termed it as the living monument of UPA’s failure. Of the Rs 15,000 crore sought by the MoRD, Rs 12,581 crore is the amount that was released by the ministry from this year’s budgeted amount to clear the pending liabilities of last year.
Finance ministry sources confirmed that they will be releasing the money sought for dues. “The remaining amount is required so as to generate the target of 217 crore person days of employment for this year,” said an official from the rural development ministry.
Ministry data shows that in the April-June 2016, the scheme generated 89 crore person days of work compared with just 54 crore person days in the same period last year.
Similarly, the number of works completed on ground has seen a sharp increase from 17 lakh in the first quarter of last year to 32 lakh in the first three months of this fiscal. Due to the huge work generation, the MoRD has exhausted much of its budget of Rs 38,500 crore already and is now down to just a fifth of the budgeted sum.
“We only have Rs 9,000 crore left with us for MGNREGA,” said an official. While only 6 states have officially declared drought in this fiscal, the extent of crisis is evident from the huge increase in MGNREGA work in all 13 drought-hit states that were listed in the recent Supreme Court petition on drought relief.