India Pulse Update

MGNREGS’s revised projection may not meet demand

<p>It has been customary in recent years to provide insufficient funds at the beginning of a fiscal year and increase them to fulfill the requirements at the revised estimate (RE) stage for the demand-driven Mahatma Gandhi National Rural Employment Scheme (MG-NREGS).</p>
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<p>According to the Ministry of Rural Development’s (MoRD) estimate, an additional Rs 26,000 crore at the RE stage in the interim Budget—up from Rs 60,000 crore at the BE level—will still fall far short of meeting the expected demand for the current fiscal year unless workflow is regulated. The MoRD requested an extra Rs 50,000 crore in RE 2023–24 for the rural employment guarantee plan, taking into account the expected demand for labor, according to a report of the parliamentary standing committee on rural development and panchayat raj that was recently presented to the Lok Sabha. “With the current pace of person-days generation against the demand for wage employment, an amount of Rs 50,000 crore hasbeen anticipated as an additional fund in RE 2023-24 over and above BE of Rs 60,000 crore,” the MoRD said in an October statement to the parliamentary panel.</p>
<p>A little over 47 days of work have been delivered to every rural home so far, in violation of the Scheme’s obligation to offer at least 100 days of “wage employment” in a financial year to every rural household. An average of 47.83 days of labor were provided to a rural family in the most recent fiscal year.In a recent report, the Parliamentary panel attacked the practice of giving smaller allocations in the BE stage, citing the 2022–2023 financial year as an example, when the initial allocation of Rs 73,000 crore was increased to Rs 89,400 crore at the RE stage.</p>
<p>“It is unclear why the budgetary allocation under the Scheme was cut for the current fiscal year and needs to be investigated.” In this sense, the Committee agrees with the DoRD’s argument that the MGNREG Scheme is a demand-driven program and that funding for it may be added back in accordance with need. But as the panel led by acting chairman Janardan Mishra pointed out, “the trimming of funds at the BE stage itself does have a cascading effect on various important aspects, such as the timely release of wages, release of material share, etc., whichhave a telling impact on the progress of the Scheme.”</p>
<p>The Committee believes that funding is a major barrier to the successful ground-level implementation of MGNREGA, which is not good for the Scheme’s performance. In light of the aforementioned, the Committee recommends that DoRD take a practical approach to addressing the MGNREGA funding shortfall and pursue the necessary increase in funding by making appropriate requests to the Ministry of Finance in order to ensure the Scheme’s successful implementation. Additionally, the Committee recommended that the MoRD make an effort to persuade the Ministry of Finance to provide MGNREGA a financial grant based on its historical spending patterns.</p>

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