Centre unlikely to alter budget for rural jobs scheme
1 min read . Updated: 19 Dec 2022, 11:28 PM IST
PremiumThe government may maintain the funding for the rural jobs guarantee programme at around the current year’s level in the upcoming budget
The government may maintain the funding for the rural jobs guarantee programme at around the current year’s level in the upcoming budget due to declining demand for employment under the scheme as economic activity has recovered in other sectors, two officials familiar with the development said.
The Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) aims to secure livelihoods for rural populations, especially during times of stress.
Demand for jobs under the programme tends to drop when relatively better jobs are available in cities.
“The allocation may not see any major increase, given that the demand for jobs under the scheme has declined this year and economic activities are picking up. With people returning to cities, it is unlikely that there would be a major spike in demand anytime soon," one of the two officials said, requesting anonymity.
Queries sent to the spokespeople for ministries of finance, and panchayati raj and rural development remained unanswered till press time.
The budget allocation for MGNREGS fell 33% to ₹73,000 crore in FY23 from ₹96,812 crore revised budget estimate for the previous year. The annual allocation declined as the covid situation eased, reducing the demand for MGNREGS jobs, and as people returned to cities to take up better jobs.
Demand for jobs under MGNREGS had surged during the peak covid period as lockdowns forced migrants to return home.
According to data from the rural employment scheme’s website, the total person-days of employment generated so far in FY23 was 2.12 billion, compared to 3.63 billion person-days of work generated in FY22.
Finance minister Nirmala Sitharaman told Parliament last week that demand for the popular scheme has declined.
“In rural areas, demand for MGNREGS in the recent past is coming down," the finance minister said, adding that the scheme is demand-driven and there is a declining trend.
During the first half of the current fiscal year, demand for MGNREGS decreased by 18%, with a total of 1.72 billion person-days of employment provided, compared with 2.10 billion person-days during the year earlier.
During the first wave of the covid pandemic in FY21, the scheme generated a record 2.26 billion person-days of employment.
Experts said the decrease in demand for employment suggests that migrant workers who had returned to their rural homes during the pandemic are returning to urban areas as economic activity rebounds.
Although the overall demand for employment under MGNREGS declined to 162.4 million person-days of employment in October, the lowest employment in the fiscal year, it recovered in November with a 19% increase to 194 million person-days.
According to the officials cited earlier, the declining demand may be partly due to the need for a larger labour force in urban centres to meet the growing demands of the infrastructure sector.
Given this, providing higher support through MGNREGS may discourage workers from seeking more productive employment opportunities in urban areas, hindering labour availability in places with more opportunities.
Despite the fall in demand in FY23, the government has sought Parliament approval for an additional ₹16,400 crore for the programme under supplementary demand for grants, above the budgeted ₹73,000 crore. So far, the Centre has released a total of ₹62,929 crore this fiscal year, according to the MGNREGS site.
MGNREGS, introduced in 2005, aims to provide at least 100 days of employment in a financial year to every rural household in India.
The programme offers jobs such as building roads, digging wells, and constructing canals, among other rural infrastructure development work.
The scheme also serves as a backup source of employment for rural households when better employment opportunities are unavailable.
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