MGNREGA gets ₹73,000 crore, a huge fall from revised FY21 estimate

When Finance Minister Nirmala Sitharaman rose to present the Union budget in Parliament on Monday (February 1), everyone was keen on a higher allocation for MGNREGA, a scheme that had provided momentum to the economy during the COVID-19 pandemic.

Sitharaman allocated ₹73,000 crore for the flagship rural job guarantee scheme — ₹28,500 crore less than the revised estimate of ₹1,01,500 crore for 2020-21.

In her last budget, she had allocated ₹61,500 crore, but in the wake of the COVID-19 outbreak, she scaled up the allocation by another ₹40,000 crore to provide stimulus to the rural economy.

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The scheme did help keep rural distress under control to a large extent by providing 1.3 crore new job cards across the country in 2020. But, it failed to match the demand, prompting MGNREGA advocacy groups and even industry body like the Confederation Indian Industry (CII) to urge the government to maintain the allocation scheme to the level of ₹1 lakh crore.

“We were not expecting such a huge fall in the allocation. As per the indication, there will be a carry forward of pending liabilities of about ₹10,000 crore this fiscal. So, the actual fund available for the scheme in 2021-22 will be just around ₹63,000 crore, which is too less to meet the rural job demand,” said M S Raunaq of the People’s Action for Employment Guarantee (PAEG), an MGNREGA advocacy group.

The scheme, which had served as a lifeline for lakhs of migrant workers who had returned to their villages during the lockdown, did not even find mention in the finance minister’s budget speech.

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The spending on other rural development schemes such as National Social Assistance Programme (NSAP) and the Pradhan Mantri Gram Sadak Yojana (PMGSY), too, have been slashed.

In last year’s budget, the allocation for the NSAP was ₹9,197 crore, while this year, it has been scaled down to ₹6,259.08 crore.

Similarly, allocation for the PMGSY has come down from ₹19,500 in 2000-21 to ₹15,000 crore for 2021-22. Allocations for the Pradhan Mantri Awas Yojana-Gramin (PMAY-G) and Rurban Mission, however, remain unchanged at ₹19,500 crore and ₹600 crore, respectively.