Tatsat Chronicle Magazine

Government Issues Clarification After Facing Criticism For Reduced Budgetary Allocation For MGNREGA

February 4, 2023

After facing severe criticism for reducing the outlay for the MGNREGA scheme, under which 100 days of guaranteed rural employment is provided to unskilled workers, by whopping 18%, the government has been forced to issue a clarification, stating that since it’s a demand-driven scheme, more allocation will be made, if necessary.

“In different media reports, a concern has been raised that the Union Budget has allocated Rs 60,000 crore for the MGNREGA scheme for 2023-24, which is 18% lower than the Rs 73,000 crore budget estimates of 2022-23. This may affect the rural job employment scheme Mahatma Gandhi NREGA to achieve its objective of providing wage employment against the demand from the rural households. This is far from truth,” said the Ministry of Rural Development in press release.

The reduced budgetary allocation for MGNREGA comes at a time when rural India is facing high unemployment rates amidst high inflation. The twin impact of these two factors has led to reduced expenditure and consumption of rural households.

The ministry justified the budget cut, stating that more allocations will be made if needed. “Whenever, additional fund is required, Ministry of Finance is requested to provide the funds. Govt. of India is committed to release funds for wage and material payments for proper implementation of the scheme, as per the provisions of the act and guidelines applicable for Central Government as well as State Governments,” noted the ministry in its press statement.

It also emphasised that budgetary outlay has no bearing on the final allocation funds. “In the FY 2019-20 BE was Rs.60,000 crore which got revised to Rs.71,001 crore, for the FY 2020-21 BE was 61,500 crore which increased at RE to Rs.1,11,500 crore and for the FY 2021-22 the BE of Rs.73,000 crore has revised to Rs.98,000 crore. Therefore, it can be seen that the actual releases to the States have been much higher than that provided for at the BE level. Even during the current financial year 2022-23, the BE has been Rs.73,000 crore, which has been revised to Rs.89,400 crore,” said the statement.