Budget 2019: 9% growth or 2% decline? Modi govt faces Hobson’s choice on MGNREGA

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Updated: June 12, 2019 6:30:29 PM

Union Budget 2019: Agrarian crisis may force finance minister Nirmala Sitharaman to raise allocation for the rural employment guarantee scheme.

MGNREGA, NREGA, Rural Employment Guarantee, Budget 2019-20, India Union BudgetRural workers (file photo).

India Budget 2019: The Narendra Modi government may have to rely on MGNREGA to boost the rural economy despite the initial criticism of the scheme by the Prime Minister. This scheme is crucial for Modi government’s efforts to address the agrarian crisis which has resulted in farmers protest during the first term of Modi government. The government has raised the allocation for MGNREGA scheme on almost every Budget. This year the outlay is less than the previous year’s spending as per the revised estimates, but the rural distress may force finance minister Nirmala Sitharaman to raise the outlay in her maiden budget to be present on July 5.

Prime Minister Modi has wholeheartedly supported the scheme after criticising it initially and increased its allocation significantly over the last five years. However, in the interim budget presented in February, the allocation for NREGA has been cut in comparison with previous year spending.

MGNREGA is one of those six schemes of central government that are officially called core of the core schemes or socially most important schemes for Modi government.

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The Union government spent over Rs 84,000 crore on these six schemes in 2018-19 as per the revised estimates given in interim budget. NREGA alone accounts for nearly three-fourth of total spending on these crucial schemes. However, Modi government scaled down the cumulative budget for these schemes, including MGNREGA.

Then finance minister Piyush Goyal in his budget speech had informed the Lok Sabha that Rs 60,000 crore have been allocated to MGNREGA scheme which was a jump of nearly 9% over the allocation during the previous year. But a scrutiny of budget paper would reveal that this allocation of Rs 60,000 crore, which was projected as a jump of 9% was indeed a decline of over Rs 1,000 crore in comparison with the previous year spending.

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Though the Modi government had allocated Rs 55,000 crore for MGNREGA scheme in 2018 budget, but according to revised estimates given in this year’s interim budget, the actual spending on MGNREGA was over Rs 61,084 crore, nearly 2% more.

If budget allocation for MGNREA for this year is compared with the actual spending for the previous year as per the revised estimates given in the interim budget then the funding for rural employment guarantee scheme has come down by nearly 2% or Rs 1,084 crore, and it has not increased by Rs 5,000 crore or by more than 9% as projected by the government.

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