Rampant misappropriation of funds allocated under the flagship National Rural Employment Guarantee Programme (NREGP) is one of the reasons for the Centre to make a five-year low provision of Rs 60,000 crore in the FY24 Budget for the jobs programme, official sources told FE.
The NREGP is the government’s largest social sector scheme administered by the rural development ministry. For FY23, the government has enhanced the outlay for the rural job guarantee programme from Rs 73,000 crore in the Budget estimate (BE) to Rs 89,400 crore in the revised estimate (RE).
Under the programme, the Centre has spent Rs 98,468 crore in FY22 and a record Rs 1.1 trillion during the Covid pandemic FY21 to give succour to migrant labourers.
“After the big jump in FY21, it was observed that cartels at the state level and panchayat level look at the budget and find a way of spending, whether there is demand or not,” a senior official told FE.
Since the scheme has become a self-fulfilling prophecy (demand grows if the budget is higher), the government has decided to start with a lower outlay in the next financial year, the official added.
On Thursday, finance secretary TV Somanathan had told FE that the lower outlay for NREGP was on account of Rs 40,000 crore higher allocation for the Jal Leevan Mission and PM Awas Yojana next year over the FY23BE. The same areas where these works are going on are also the catchment area of the NREGP, he had said, adding that there would be an offsetting reduction in demand in the jobs programme. Secondly, since the economy has normalised compared to 2020, the government was hopeful that NREGP demand levels could go back to FY20 levels. If there is a genuine demand, the government will again top up the allocation at the revised estimate stage, Somanathan said.
Separately, the rural development ministry has set up an expert panel to study the effectiveness of the NREGP in poverty alleviation and suggest measures for improving the implementation of the mega job guarantee scheme. The nine-member expert panel is chaired by Amarjeet Sinha, former secretary, ministry of rural development, and the panel is to give its report by end of February.
The panel will also examine expenditure trends across various states and identify reasons for variations in NREGP expenditure and the panel would also redesign work opportunities available under this scheme.
The NREGP spending in economically poorer states such as Bihar and Odisha was lower than in states such as Rajasthan and Tamil Nadu.
The expert panel will recommend institutional mechanisms, including governance and administrative structures, for more effective utilisation of funds under the MGNREGS, especially to address poverty.
Because of the Covid19 pandemic, demand for work under the NREGP rose sharply. According to official data, in FY21, person days of work generation rose to 3.89 billion from 2.65 billion in FY20. In FY22, person days of work generated was 3.63 billion. The NREGS, which was launched in 2006, guarantees 100 days of work to each rural household per annum. The scheme allows workers to be associated with various asset-creation activities such as road construction, ponds and rejuvenation of water bodies, among others.