Govt allocates additional Rs 40k-cr for MGNREGS

The Narendra Modi government on Sunday announced Rs 40,000 crore of additional money in the federal job guarantee programme, MGNREGS, as demand for work continues to surge, with millions of daily wagers returning home.

The 66% top-up, above the original allocation of Rs 61,000 crore in the budget, made the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) the only social welfare programme with a kitty of Rs one lakh crore.

Announcing the fifth and final tranche of the economic package in view of the coronavirus disease (Covid-19) outbreak, Union finance minister Nirmala Sitharaman said the allocation for MGNREGS was being increased by Rs 40,000 crore.

The rural job guarantee programme, enacted in 2005, has emerged as the backbone of rural income, when many experts have been asking for more money in the hands of the poor. The government, in the first week of April, allotted Rs 33,300 crore or more than half of its annual budget to the states anticipating a rise in the number of beneficiaries.

BJP president JP Nadda said the decision reflected Prime Minister Narendra Modi’s “concern and timely initiative”, adding that the higher funding will provide adequate work and earning opportunities to migrant families returning home. The Congress, too, welcomed the decision but pointed out that the Centre was spending money worth only 1.6% of the GDP as against its promise of giving a stimulus equal to 10% of India’s GDP.

A quick look at MGNREGS data shows that the Centre planned to create about 40% of its annual target of 280 crore person-days or work between April and July — an indication of the urgent need for more money as well as high demand from beneficiaries.

A government presentation said that with the new allocation, MGNREGS will help “generate nearly 300 crore person-days in total” and address need for more work, including returning migrant workers in monsoon season as well. It also hoped for “creation of larger number of durable and livelihood assets including water conservation assets” that will “boost the rural economy through higher production”.

In the initial estimate, the government had the target to create 26.2 crore person-days in April, 34.9 crore in May, 34.7 crore in June and 24.2 crore person-days in July to reach the target of 120 crore person-days out of the 280 crore person-days in the first four months of the financial year.

The first allocation of Rs 33,300 crore has been able to meet all pending arrears of both wages and material costs and kick-start the job scheme in these challenging times.

Another set of data reveals how the job demand has spiralled as people return home from big cities. In April, 1.21 households demanded jobs under the scheme but in May, the numbers nearly doubled, with 2.23 households asking for work. Under the MGNREGS act, a state is bound to give work to beneficiaries.

Many experts have also suggested that the government should consider lifting the ceiling of 100 days — as envisaged in the act — to at least 150 days of work for one person in a year as job opportunities for millions of rural Indians have squeezed due to the pandemic.

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