‘Bloodbath’: Activist Nikhil Dey on Budget Cuts to MGNREGA

The allocation has come down from Rs 1.11 lakh crore in FY'21 to Rs 60,000 crore for FY'24 despite nearly 25% of the money being spent on clearing dues.

New Delhi: Flagging the continuous year-on-year decline in budgetary allocation for the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA), under which only Rs 60,000 crore has been allocated in Union Budget 2023-24, the social organisations which had urged a higher allocation to meet the expenditure and pending wages have cautioned that the approach could spell the death of the employment scheme.

“It’s a bloodbath. They are trying to kill the programme,” said Nikhil Dey of NREGA Sangharsh Morcha while reacting to the Union Budget 2023 slashing the allocation for the scheme by nearly 32% decline from the revised estimate of Rs 89,400 crore for 2022-2023. In comparison to 2020-21, when the allocation stood at Rs 1.11 lakh crore, the amount has almost halved this time.

Chart: Budget 2023’s NREGA Allocation Is Lower Than All Previous Modi 2.0 Years

Rs 2.72 lakh crore was sought to meet expenditure requirements

The Morcha, along with People’s Action for Employment Guarantee, had urged an allocation of Rs 2.72 lakh crore for MGNREGA in 2023-24 in view of the existing inflation, pending worker wages and high demand.

Providing the rationale behind the demand, Dey had said: “The unpaid dues in the financial year 2021-22 were registered to be Rs 24,403 crore against the budget allocation of Rs 73,000 crore. Consequently, 25% of the budget was utilised to clear the dues, thereby creating a shortage of funds for the latter year.”

The two social organisations had also pointed out that with about 21% of the annual budget over the past five years being spent on clearing the arrears carried forward from previous years, and with the unpaid dues being Rs 16,070 crore in 2022-23, it was expected that the dues pending at the end of the current fiscal would be around Rs 25,800.

A look at the data over the previous years reveals that while between FY’16 and FY’21, there was a rise in the allocation under the scheme, it dropped sharply thereafter. The allocation had risen by 55% between FY20 and FY21 – the peak of the COVID-19 pandemic – to reach Rs 1.11 lakh crore. But it came down the following year, FY’22, to Rs 98,000 crore and then dropped further for FY’23 to Rs 73,000 crore. This time, the allocation has been reduced to a new low of Rs 60,000 crore.

‘Allocation is nearly Rs 30,000 less than even the revised estimate’

Talking to The Wire, Dey said only on Tuesday, January 31, had the Morcha issued a press release in which it said that Rs 2.72 lakh crore was needed for MGNREGA. However, the allocation was nearly Rs 30,000 crore less than even the current fiscal’s revised estimate.

On where this would leave the scheme and how it would be impacted, Dey said, “Even the revised estimate of Rs 89,400 crore would leave us nearly Rs 20,000 short of this year’s expenditure. So they are trying to kill the programme.”

The social activist argued that “it is a programme which does not allow less allocation so they are now saying that since the market is giving jobs, when there is a demand we will give more money. The demand is there and they are totally making this up. They have just cut the allocation.”

Workers employed under NREGA on the outskirts of Ajmer, working during the COVID-19 Pandemic. Photo: PTI

Nearly 5.6 crore households likely to be impacted

Dey had on Tuesday spelt out how the scheme was of utmost importance for millions of households across the country. He had urged higher allocation, saying about 5.6 crore households benefitted from the scheme in 2022-23.

On calculating the wages for 100 days for each household, he had stated that this would cost over Rs 1.76 lakh crore and along with the material, administration and other costs, the cost could go up to over Rs 2.46 lakh crore. The Rs 2.72 lakh crore figure, he explained, is arrived a by adding the pending dues of Rs 25,800 crore to this figure. Dey had added that anything less would deprive the workers of just wages.

Reacting to the budgetary allocation, Dey also charged on Wednesday that the government has “not given a rupee for West Bengal this year.” In this regard, he had stated on Tuesday that the pending dues for West Bengal, which contributes around 10% of the total workers in the country, have not been cleared since December 2021 and this was depressing the workers.

Also Read: Eight Charts to Make Sense of Budget 2023

‘Actual employment is only for 40 days’

Dey also told The Wire that while the scheme aims to provide 100 days of employment to the workers, the actual figure this year has been close to 40 days only. Moreover, he had pointed out earlier that only about 3% of registered workers were able to gain employment for 100 days.

The scheme, as per its mission statement, “aims to enhance livelihood and security in rural areas by providing at least 100 days of employment in a financial year to every household.” However, recent analysis by PRS Legislative Research revealed that between 2016-17 and 2020-21, the average number of days of employment it provided was only 48 days per household.

Also, while the law provides that workers seeking employment and not receiving work opportunities within 15 days are eligible for compensation, Dey said that only 1.7% of the workers were deemed eligible for payable compensation.