Budget 2024: Govt keeps MGNREGA funding at Rs 86,000 cr despite call for increase

Union finance minister Nirmala Sitharaman has earmarked an unchanged Rs 86,000 crore for the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) under the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA). This is four per cent lower than the Rs 90,000-crore-plus that the government had spent on the job scheme last year.

During the fiscal year FY21, the allocation for MGNREGA exceeded Rs 1 lakh crore owing to the pandemic, but has since decreased. In FY21, expenditures were 80.8 per cent higher than the originally budgeted amount.

In the interim Budget presented in February, Sitharaman had increased the amount to Rs 86,000 crore in the Budget Estimate (BE) for 2024-25. This was the same as the revised estimates for FY 2023-24. This increase came a year after the Union Budget 2023 had cut the allocation for MGNREGA to Rs 60,000 crore, the lowest in four years.

“There was a slight hope that because of unemployment and election losses, there would be course correction and change in strategy, but the government doesn’t want to put their money where the mouth is. This unchanged budgetary allocation for MGNREGA means that wages also won’t increase. It naturally follows that rural spending will then either stagnate or decrease,” says Dipa Sinha, development economist and researcher.

Budget allocation for education

In the FY25 budget, Sitharaman earmarked Rs 1.48 lakh crore for education, employment, and skilling programmes, some of which are allocated as loans. The allocation for schools saw a 4.2 per cent increase, rising to Rs 73,008 crore in 2024-25 from Rs 68,804 crore (BE) in 2023-24.

The finance minister announced a revised model skill loan scheme wherein loans up to Rs 7.5 lakh will be facilitated, guaranteed by a government-promoted fund. This initiative aims to benefit 25,000 students annually. The Skill Loan Scheme provides financial assistance to students pursuing technical courses offered by training institutes, polytechnics, and similar institutions.

Sitharaman said courses would be aligned to meet the needs of industry and new courses to be introduced likewise. Furthermore, students who are ineligible for current schemes will now qualify for loans up to Rs 10 lakh for higher education at domestic institutions. Sitharaman specified, "E-vouchers for loans up to Rs 10 lakh for higher education in domestic institutions will be directly provided to 100,000 students annually, with an annual interest subvention of 3 per cent on the loan amount."

Questioning this, Sinha said the budget for higher education hasn’t increased at all. This is less than the revised budget for last year. “Also, why should higher education cost Rs 10 lakh in this country?"

In the interim Budget, the Union government allocated Rs 1.2 lakh crore for education, a roughly 7 per cent decrease compared to the revised estimate for 2023-24.

Additionally, the funding for UGC (University Grants Commission) was reduced significantly by 60.99 per cent, decreasing to Rs 2,500 crore from the previous year's revised estimate of Rs 6,409 crore. Conversely, grants for Central universities saw a substantial increase, with Rs 15,928 crore allocated for the financial year 2024-25, marking an increase of over Rs 4,000 crore.

Gender budget

More than Rs 3 lakh crore has been allocated towards initiatives aimed at benefiting women and girls, such as establishing working women's hostels in collaboration with industries, setting up creches to boost female workforce participation, and implementing specialised skill development programmes for women.

However, several gender rights activists highlighted that if one were to go by the finance minister’s speech, then it would seem that the government has no plans to establish these hostels or creches, but instead intends for private players to initiate them.

The finance minister has allocated Rs 500 crore for a scheme called Namo Drone Didi, which intends to provide rural women with the skills to become drone pilots for agricultural purposes. This scheme was launched in March 2024.

The gender budget for this fiscal year amounts to a little over Rs 3.27 lakh crore, constituting 6.78 per cent of the total Budget. Compared to the fiscal year 2023-24, which had an allocation of about Rs 2.23 lakh crore, this marks a substantial increase of over 46 per cent.

This gender budget is also hogwash, says Sinha, as the statement from Sitharaman makes it seem like something new has happened, but this is all from under-funded existing schemes. This was there last year, too.

According to the ministry of child and development, in the interim Budget, 43 ministries reported a total of Rs 3.09 lakh crore in the Gender Budget Statement 2024-25 (BE), compared to Rs 2.23 lakh crore in 2023-24.