As much as 40% of the budget allocation for the flagship Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) has already been utilised, implying that the government may have to increase the outlay for the demand-driven scheme from Rs 86,000 crore estimated in the interim Budget.
However, it may still choose to retain the MGNREGS outlay at the same level in the full Budget to be presented later this month, as it has the option to provide supplementary funds as and when required, and account for these in the revised estimate (RE).
Till July 10, the Centre has spent Rs 34,056 crore for the scheme.
Last year, the government had to enhance the budget spending on the scheme to Rs 89,000 crore from the budget estimate of Rs 60,000 crore as demand turned out to be stronger. The Centre has been saying that fund availability would not be an issue for scheme.
So far in FY25, 104.5 crore person days work have been generated and the number could touch around 309 crores achieved in FY24.
According to official data, month-wise work demand has marginally moderated from 27.2 million in May to 26.4 million in June 2024.
MGNREGS aims to provide at least 100 days of guaranteed wage employment in a financial year to every household in rural areas of the country, whose adult members volunteer to do unskilled manual work, mainly during off-seasons.
In the meantime, the Centre is taking various initiatives to plug leakages, which some estimates suggest could be around 30% of the annual spending in the scheme.
From January 1, 2024, the government has made the Aadhaar-Based Payment System (ABPS) mandatory for payment of wages. Under the ABPS, the Aadhaar of a worker is linked with her MGNREGS job card and bank account.
Direct benefit transfer (DBT) has saved an estimated Rs 42,534 crore on wages on account of the deletion of duplicate, fake/ non-existent, ineligible beneficiaries till March 2023.