The government has signalled that it wants to revisit the Mahatma Gandhi National Rural Employment Guarantee Act scheme, arguing that it has not met its expected outcome of poverty alleviation. File
| Photo Credit: The Hindu

Notwithstanding the BJP’s significant losses in rural constituencies in the 2024 general election, the first Budget of the new NDA government did not contain any directional shift for its flagship programme for rural India, the Mahatma Gandhi National Rural Employment Guarantee Act scheme (MGNREGS).

For the financial year 2024-25, ₹86,000 crore has been allotted for MGNREGS. This may be ₹26,000 crore more than last year’s allocation of just ₹60,000 crore, but it is still ₹19,297 crore less than the scheme’s actual expenditure of ₹1.05 lakh crore in the last financial year 2023-24, according to data available on the website of Union Ministry of Rural Development. As per an analysis by The Hindu data team, this year’s allocation for MGNREGS is just 1.78% of the total budgetary allocation, which marks a ten-year low in the scheme’s funding.

According to an analysis by The Hindu data team, the BJP lost 53 Lok Sabha constituencies that can be categorised as rural seats this year, in comparison to its 2019 tally.

‘Suppressing demand’

Every year, the rural jobs scheme has been dogged by this problem of under-allocation of funds. Finance Minister Nirmala Sitharaman has argued that MGNREGS is a demand-based scheme and that the government offers more money as and when the requirement arises. But activists have argued that the lower allocation contributes in artificially suppressing the demand for work under the scheme.

“Not only is the allocation for FY 2024-25 less than the expenditure in FY 2023-24, it also does not take into account the increased demand in the first quarter of this financial year. In comparison to 2023-24, in the first three months of the ongoing financial year, 5.74 crore more person days have been generated. Additionally, the increase in wages for the current year is also not accounted for,” said Chakradhar Buddha, who is affiliated with LibTech India, a consortium of academics and activists. Under MGNREGS, person days are defined as the total number of work days by a person registered under the scheme in a financial year.

In fact, ₹41,500 crore has already been spent under the scheme in the first four months of this financial year, leaving a mere ₹44,500 crore for the remaining eight months.

Reviewing outcomes

The government has signalled that it wants to revisit the scheme, arguing that it has not met its expected outcome of poverty alleviation.

Also read:MGNREGS would continue, but only as a living monument to failure Congress’ failure: PM Modi

“The Economic Survey, released on Monday, had laid the groundwork to justify the low allocation, by claiming that MGNREGS demand does not necessarily correlate with rural distress. As a percentage of GDP, this year’s allocation continues to be lower than 0.3% and if you adjust for inflation, this year’s allocation is even lower than last year’s. The steady mutilation of MGNREGS has been repeated continuously for 10 years now,” said Rajendran Narayanan, who is part of the economics faculty at Azim Premji University.