2019 Budget Allocation for MGNREGA Is Less Than What Was Spent Last Year

The problem of giving less than what is needed, and then making up for it later, continues in the interim budget.

New Delhi: Interim finance minister Piyush Goyal announced in the Lok Sabha during his interim budget presentation on Friday that the government has allocated Rs 60,000 crore for the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGA) for the financial year 2019-20.

The minister said the allocation for the flagship programme of the rural development ministry would be increased if required.

However, data shows that the announced allocation is 1.8% less than what was given for the 2018-19 financial year.

In January 2019, the government had to allocate an additional Rs 6,084 crore to the programme to meet its financial demands, thus taking up the total amount to be spent in the financial year 2018-19 to Rs 61,084 crore. In February 2018, the Union budget had earmarked Rs 55,000 crore to the demand-driven rural employment scheme.

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If you take into account the budgetary distributions and the supplementary allocation of funds to the programme for the last few years, it can be deduced that though the demand for it has been steadily increasing, the government has not been able to address it fully, leading to pending liabilities.

Prior to the presentation of the 2018 full budget, NREGA Sangharsh Morcha, a country-wide coalition of organisations and individuals, had submitted a memorandum to the Union finance ministry stating that there should be an annual allocation in the range of Rs 80,000 crore to be able to minimally function as per its legal provisions.

After the budget was presented, the coalition issued a statement highlighting the point that the inadequate budget for the MGNREGA would likely lead to a number of problems, such as delays in wage payments, non-payment of minimum wages, low scale of work, etc.

The year before that saw these glitches due to under-allocation of funds. As per a Supreme Court order, the government is supposed to pay a fine to the workers if it fails to pay them wages on time. The underfunding of the programme is leading to a violation of the SC order.  

In December 2017, a study conducted by Rajendran Narayanan from the Azim Premji University, Bangalore, in collaboration with two independent researchers, had corroborated the Morcha’s stand on requirement for more budgetary allocations for MGNREGA. It pointed out that 80% of the funds allocated under the scheme was utilised in just four months, leaving merely 20% for the rest of the year.

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Early January, several MPs, activists, academics, bureaucrats and leaders of farmers’ movements wrote an open letter to the Prime Minister highlighting the chronic underfunding of the programme brought to address rural poverty.

In a press note issued on January 30, the Morcha said, “The supplementary budget (of Rs 6,084 crore made in mid January) is too little, too late.” It also pointed out that even that amount “is yet to released” by the government as the NREGA website still shows the total release of funds so far only at Rs 53,353 crore. Demanding the immediate release of funds, it said, “Including the state share, the total availability of funds is Rs.59,709 crore, whereas the total expenditure so far is Rs 63,537 crore.”

On January 25, the BJP government in Jharkhand sent a letter to the rural development ministry seeking additional funds to clear a liability of Rs 39 crore. The Morcha’s January 30 statement highlighted that the state government’s letter also mentioned that “no funds have been released to NE-FMS account for the last two days (January 24 and 25, 2019). This also exposes the claims of the Ministry that the NE-FMS mechanism has streamlined the funds flow to the states”.

The National Electronic Fund Management System (NE-FMS) was introduced by the Modi government in 2016 to streamline the flow of funds to the states meant for paying wages under the programme.

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The statement pointed out that “81 per cent of the Fund Transfer Orders (FTOs) of January 2019 and 43 per cent of FTOs of February 2018 (and some FTOs of previous months) remain unprocessed by the Ministry of Rural Development.”

Reacting to the interim budget announcement for the programme, Jharkhand NREGA Watch, in a statement, called it a “mockery”.

“On one hand, migration is increasing in Jharkhand, on the other hand, the central and state governments are constantly undermining and weakening the constitutional guarantee for employment in rural areas, “the statement said, adding, “Tomorrow (February 2), it will be 13 years since the NREGA was enacted in Parliament. However, the right to work has become a mockery in today’s time.” In the last three years, the state government has deleted seven lakh job cards, many of whom were not aware of it and continued to work under the programme.

As per the NREGA Act, each rural household can demand 100 days of work from the government.