MGNREGA Is Running Out of Funds. Will Budget 2020 Fix That?

MGNREGA’s financial statement as of January 26 has shown as many as 15 states in the red.

New Delhi: The Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) scheme is facing an acute fund crunch. According to a report in The Hindu, more than 96% of the allocated money has already been spent or is needed to pay pending dues. Less than Rs 2,500 crore is left to sustain the scheme for the next two months, the report says.

MGNREGA’s financial statement as of January 26 has shown as many as 15 states in the red. The Hindu report says Rajasthan has the highest negative net balance of Rs 620 crore and Uttar Pradesh has a negative of Rs 323 crore. This year’s budget allocation for the scheme was only Rs 60,000 crore, lower than the amount spent in the previous year.

According to The Hindu, in Rajasthan, workers’ wages have not been paid since the end of October. Early this month, Rajasthan chief minister Ashok Gehlot had written to Prime Minister Narendra Modi, demanding that the Centre immediately releases pending dues of Rs 1,950 crore.

Besides the fund crunch, the NREGA Sangharsh Morcha, a collective of rights organisations, have also raised concerns over the delay in depositing wages. In a recent article authored by Amarjeet Sinha, a former secretary of the Ministry of Rural Development, 75% of the wages are paid within 15 days of the completion of work, but the collective in its press statement issued on January 27 has said that “Despite calculating delays made by the center in depositing wages, the delays made by the center is not added to calculate delay compensation.” The situation, they suggest, on the ground may be worse as states do not always enter pending payments into the information system.

Also read: Share of Young People in MGNREGA Workforce Rises, Pointing to Rural Distress

The collective has demanded that the Centre fix accountability on the agencies that cause the delays. “The center should ensure that workers are compensated for the full duration of the delay in the crediting of wages to their bank account,” the press statement says.

“January, February, and March are months with little agricultural activity, when rural workers desperately need employment. However, the scheme is running out of money, and will enter next year with pending liabilities,” Rakshita Swamy of the People’s Action for Employment Guarantee movement has told The Hindu.

While some states still have funds remaining, activists say this is only because they are actively suppressing demand and turning workers away. The Hindu report has cited Karnataka’s example where many districts have been declared drought-hit, people are eligible for 150 days of work. “However, they are not even able to get work for 100 days,” Abhay Kumar, state coordinator of the Grameen Coolie Karmikara Sangathan, a registered union for rural workers has told The Hindu.

Since most states are running in red, Swamy, in his response to The Hindu, has said: “The scheme is already running out of money, and will enter next year with pending liabilities yet again.” Swamy hopes finance minister Nirmala Sitharaman will announce a more generous allocation for the scheme in the upcoming Budget.