Over 70 per cent of Modi govt’s MGNREGA budgetary allocation for FY 2021-22 exhausted within five months

More than 70% of the Union government’s budgetary allocation for the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) in 2021-22 has been utilised within five months of the commencement of the financial year 2021-22. The budget had allocated Rs 73,000 crore for MGNREGA, of which Rs 51,815 crore (71% of the allocation), has already been spent.

The government hasn’t revised the budgetary allocation yet. Moreover, within five months of the 2021-22 financial year, 60.96% of the allocated person days have been exhausted. At least 169.4 crore person days have been utilised of the 277.89 crore allocated in the labour budget. This will lead to a shortage of both budget and person days, amounting to payment delays and work allocation. Only 108 crore person days are remaining of the allocated person days.

The number of households that have sought work through MGNREGA has consistently risen in the last four months. In April, 2.73 crore households worked under the scheme; in May, 2.76 crore households; in June it swelled to 3.51 crore and it dipped in July to 3.19 crore households. The drop in July is due to the monsoon and slowdown of administrative work.

In 2020-21, the budgetary estimate for MGNREGA was Rs 61,500 crore, but Rs 1,11,500 crore was spent eventually. This year’s budgetary allocation is Rs 38,500 crore less than the revised estimate for 2020-21. In 2019-20, the union government budgetary estimate was Rs 60,000 and the actual spend was Rs 71,020.35 crore.

MGNREGA is a demand-driven programme and delay in wage payments has a serious impact on poverty levels in many states.

So far, 5.36 core households have worked this financial year, while in FY20-21, 7.55 crore house holds worked.

“If we consider at least 6 crore households will work this financial year for at least 60 days on an average, it makes for 360 crore person days. The current average per person–per day rate is Rs 281.93. This means at least Rs 1.02 lakh crore will be needed for uninterrupted operations at the ground for this financial year,” explained Debamalya Nandy, member, NREGA Sangharsh Morcha.

Due to the inadequate allocations, the ground implementation has been slow. “The payments to the workers have been regularly delayed by the Centre. This financial year, the central release of payments has been delayed by almost a month twice. Additionally, the recent caste-based payment processing system is unnecessary and will add to the delays,” added Nandy. There has been an absence of governmental push too.

In the financial year 2020-21, 11.19 crore individuals worked under the scheme and 389 crore person days were generated, both of which were the highest since its inception in 2006.

“What is needed in a pandemic year is more budgetary allocation and 150 days of work. There is a provision in the Master Circular stating that the number of work days can be increased in case of a disaster. Covid-19 is a natural disaster and the funds can be directed from the National Disaster Relief Funds. Keeping in mind the inflation, the wages must be increased too,” asserted Nandy.