Budget 2021: MGNREGA needs higher allocation to meet rural job demand

Last year, the government had initially allocated ₹61,500 crore for MGNREGA in the Union budget

Squashing all expectations, the Budget 2021-22 has cut back on the allocations to MGNREGA and other rural schemes. Photo: iStock

With the demand for works under MGNREGA continuing to be very high even post-lockdown, the Modi government is under pressure to raise allocation for the scheme, once ridiculed by the prime minister.

Last year, the Centre had initially allocated ₹61,500 crore for the Mahatma Gandhi National Rural Employment Guarantee Scheme in the Union budget with a target to generate 289 crore person days’ work.

Union Finance Minister Nirmala Sitharaman later in May last year raised the allocation by another ₹40,000 crore to help generate in total 300 crore person days’ work to offset the impact of pandemic-induced lockdown on the rural economy.


Already 314.75 crore person days’ work has been generated exhausting over 90 per cent of the allocated fund even as two more months left in the current fiscal, pointed out MS Raunaq of the People’s Action for Employment Guarantee (PAEG), an MGNREGA advocacy group.

As the existing fund is not adequate to meet the demand, the allocation of job has already been slowed down. Analysis of the data available on the MGNREGA portal reveals that of the total household job seekers, 20 per cent less got the work in December than in November last year.

Job demand of about 61 per cent households was fulfilled in December as compared to 81 per cent in November. Incidentally, demand for jobs by households increased over 55 per cent in December. The increase was 49.57 per cent in November.

Related news | Rural unemployment rate shows a sharp rise due to fewer MGNREGA jobs

More than 10 lakh people applied for job cards in West Bengal since the launch of Duare Sarkar (government at doorstep) scheme by the state government on December 1, according to state government sources. Since the launch of the scheme by the previous Congress-led UPA government in 2007, around 1.39 crore job cards have been issued in the state.

The demand for the rural job witnessed a significant spike after lakhs of migrant labourers returned to the state during the lockdown period, said officials of West Bengal Panchayat and Rural Development Department.

There has been a nationwide spike in demands for work under the MGNREGA, Raunaq told The Federal.

According to the PAEG’s latest MGNREGA tracker, 1.3 crore new job cards were issued in the country in 2020, and over one crore more households got work under the scheme compared to 2019.

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Interestingly, the tracker also pointed out that the average employment per household in 2020 was almost 7 per cent less than the previous year. The average household employment in 2020 was only 41 per cent as compared to 48 per cent last year.

To meet the demand supply ratio, Raunaq said the central government should at least allocate ₹1 lakh crore for the scheme in the forthcoming Union budget.

“To meet the rural job requirement, ideally the allocation should be around ₹2 lakh crore. But at least the government should provide ₹1 lakh crore in the ensuing budget to cater to the need of the existing job seekers,” he said.

The Confederation Indian Industry (CII), in a pre-budget memorandum, also urged the government to maintain the allocation for the rural job scheme to the level of ₹1 lakh crore to match the high demand.

Ironically, in February 2015, Prime Minister Narendra Modi had mocked the scheme in the Parliament as “living monument of Congress-led UPA’s failures.”

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