About Half of Allotted MGNREGS Funds Used up, With 8 Months of FY Still to Go

Because of the increase in demand due to the COVID-19 lockdown, more than three lakh households have already completed 100 days of work under the scheme.

New Delhi: The total expenditure under the Mahatma Gandhi Rural Employment Guarantee Scheme (MGNREGS) has already hit Rs 48,759 crore, which is about half of the total Rs 1 lakh crore allocated for the financial year 2020-21.

The data includes expenditure till August 4, implying that the payments account for just the first four months of the financial year with eight months to go and reflect the significant uptick in MGNREGS demand in rural India since the COVID-19 induced lockdown.

Bear in mind that the Rs 1 lakh crore allocation reflects the total allocation taking into account the Rs 40,000 crore that was added to the original budget of Rs 60,000 crore when the increase in demand for the scheme became apparent in May.

A recent survey by the Azim Premji Foundation (AFP) found that a large number of gram panchayats in the country have already exhausted the funds allocated to them under the scheme.

The demand for MGNREGA work has also reached record highs as 91 crore person days were generated in the last two months. More than three lakh households have already completed 100 days of work under the scheme.

The AFP survey which is based on reports from several partner organisations noted, “The Gram Panchayats’ shelf of projects will likely end by August 2020. Therefore, a quick process of creating further sets of projects is urgently needed. In several Gram Panchayats, the approved projects have already been exhausted.”

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The survey also says that the demand for work under MGNREGS will remain ‘very high’ at least till the end of financial year 2020-21.

As a result, the AFP has recommended that the allocation under MGNREGS will be further increased by another 1 lakh crore to a total of Rs 2 lakh crore. It also suggests that the permitted work limit be increased to 200 days per household.

It also notes that work under MGNREGS is slowing down with the monsoon even though demand has not dropped.

“Despite kharif operations, the demand for work is still very high; but workers in several States have been given the impression that MGNREGA work is suspended during the monsoon season,” the report said.

The survey also found that payment is ‘more or less’ on time in places where banking correspondents exist. However payment through banks remain inefficient as the rural branches have limited capacities and infrastructure.