Rural development schemes: Workers engaged in the MNREGS works at Siddharampuram in Anantapur district.
| Photo Credit: Prasad RVS

In FY25, the government is expected to spend ₹2,65,808 crore on rural development. The allocation marginally increased by ₹26,824 crore, when compared with the revised estimates for the year FY24. However, the increase in the overall spending on rural development, when compared with the revised estimates, is not equally distributed among the major schemes that feature under this umbrella. 

For instance, in absolute terms, the government is expected to spend ₹86,000 crore in FY25 on the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA), the same amount when compared with FY24 revised estimates. This is one of the major schemes of the Rural Development Ministry which aims to enhance the livelihood security of rural households by providing at least one hundred days of guaranteed wage employment. 

The government is expected to spend ₹2,027 crore on the Indira Gandhi National Widow Pension Scheme (IGNWPS), the same amount when compared with FY24 revised estimates. Under the scheme central assistance is provided to widows in the age group of 40-79 years and belonging to families living below the poverty line

The government is expected to spend ₹12,000 crore on the Pradhan Mantri Gram Sadak Yojana (PMGSY) in FY25, a decrease of ₹5,000 crore compared with FY24 revised estimates. The scheme provides all-weather road connectivity to all eligible habitations of the designated population size. 

On the other hand, in absolute terms, the government is expected to spend ₹54,500 crore on Pradhan Mantri Awaas Yojana Gramin (PMAYG), an increase of ₹22,500 crore when compared with FY24 (revised estimates). The scheme aims to provide housing, with basic amenities, to poorer sections of society in rural areas.

The government is expected to spend ₹15,047 crore on Deendayal Antyodaya Yojana- National Rural Livelihoods Mission (DAY-NRLM), an increase of ₹918 crore compared with FY24 (revised estimates). The scheme aims to organise rural poor women into Self Help Groups and support them till they attain an appreciable increase in incomes over a period of time. 

The government is expected to spend ₹6,646 crore on the Indira Gandhi National Old Age Pension Scheme (IGNOAPS), a marginal increase of ₹11.5 crore when compared with FY24 revised estimates. Under the scheme, assistance is provided to persons of 60 years and above and belonging to families living below the poverty line.

While the above data compares the allocations in absolute terms, it is more prudent to compare the spending as a share of the total Budget allocated in each year. 

Chart 1 shows the allocation to rural development as a share of the total Budget, across years.

Charts appear incomplete? Click to remove AMP mode

In FY25, the government is expected to spend 5.58% of its total Budget on rural development. The share increased from 5.32% in FY24 (revised estimates). Despite the increase from last fiscal year, the allocation share did not cross the 6% mark as it did in FY22, FY21, and FY18.

Chart 2 shows the allocations for MGNREGA, IGNWPS, PMGSY and IGNOAPS as a share of the total Budget, across years.

 In FY25, the government is expected to spend 1.8% of its total Budget on MGNREGA — the lowest in at least the last nine years. In FY25, the government is expected to spend 0.04% of its total Budget on IGNWPS — the lowest in at least the last nine years. In FY25, the government is expected to spend 0.25% of its total Budget on PMGSY — the lowest in at least the last nine years. In FY25, the government is expected to spend 0.14% of its total Budget on IGNOAPS — the lowest in at least the last nine years. 

Chart 3 shows the allocations for PMAYG and DAY-NRLM as a share of the total Budget, across years.

In FY25, the government is expected to spend 1.14% of its total Budget on PMAYG — the highest in at least the last nine years. In FY25, the government is expected to spend 0.32% of its total Budget on DAY-NRLM — the second highest in at least the last nine years. 

So, in terms of allocations as a percentage of the total Budget, the share has decreased in four schemes and increased in two schemes, even while rural development’s overall allocation as a share of the Budget has increased. 

Also read:Interim Budget 2024 | Net zero gain for MGNREGS