PMO asks rural development ministry to explain MGNREGS funds to Andhra

Jun 25 2014, 12:28 IST
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SummaryVote-on-account: 30% of the total funds was released to state

In what has come as an embarrassment for the Ministry of Rural Development, the Prime Minister’s Office has sought a clarification from it on the disproportionate release of funds to Andhra Pradesh for the flagship rural job guarantee scheme from the funds allotted to the scheme under the vote-on-account for financial year 2014-15 earlier this year.

The Mahatma Gandhi National Rural Employment Guarantee Scheme was allocated around Rs 13,000 lakh under the vote-on-account passed by the previous UPA government. Of this, the ministry has sanctioned over Rs 4,000 lakh to Andhra Pradesh alone, which would amount to 30 per cent of the total funds, a disproportionately large share for one state. Introduced in 2006, the MGNREGA promises 100 days of employment every year to each rural household.

The first sanction of Rs 1,96,590 was made on April 3, under the UPA government, while the second sanction of Rs 2,27,000 was made on May 23, a week after the Lok Sabha poll verdict.

The PMO, according to government sources, has now sought a clarification from the ministry on the disproportionately large share of funds sanctioned for just one state. Ministry officials, who did not wish to be named, say the allocation was made on the basis of a “pre-determined criteria” based on the labour budget presented by the state.

Each state is required to prepare a labour budget for the next financial year containing the details of the anticipated demand for unskilled manual work and the plan to engage labour in projects under the scheme. Essentially, a labour budget is an estimated projection but is often overstated.

A ministry official involved with the implementation of the scheme, however, says the “moderation” of the labour budget has to happen at the ministry level, with funds being allocated accordingly. According to the official, in the case of Andhra Pradesh this year, such moderation was clearly not done, thus leading to such a high allocation, particularly when the funds available under vote-on-account were limited and for a short period, even though Andhra Pradesh is one of the better performing states.

According to sources, with a chunk of the funds going to Andhra Pradesh, several other states are facing a crunch to meet the requirements for delayed wages and other dues. They have been asked by the ministry to use state funds for now. Moreover, according to the latest ministry data, of the Rs 4,000 lakh sanctioned to Andhra Pradesh, the unspent balance as of June 24 is as much as Rs 2,64,000 crore, indicating the massive gap between what has been allotted to the state and its ability to spend.

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