Most of Centre’s flagship welfare schemes keep pace despite slowdown

By: |
May 17, 2021 5:15 AM

Many of the schemes such as MGNREGA, Ujjwala, NSAP and PM Awas Yojana have seen a big jump in both physical and financial achievements in FY21 as additional succour was provided by the Centre to people affected by Covid-19 (see chart).

For instance, about Rs 31,000 crore was transferred to women Jan Dhan account holders in the last financial year as Covid relief.For instance, about Rs 31,000 crore was transferred to women Jan Dhan account holders in the last financial year as Covid relief.

Notwithstanding the resource crunch due to economic slowdown, which worsened after Covid-19 outbreak, the Centre has largely kept the momentum of spending on its flagship schemes in recent years, especially in FY21. In fact, the spending has accelerated on the rural job guarantee scheme (MGNREGA) and the schemes on pucca houses for the poor (PM Awas), social assistance to weaker sections (NSAP) and PM-Kisan, under which around 10 crore farmer families are being given Rs 6,000 each a year.

In terms of physical achievement, some schemes have reached or are approaching saturation levels – these include the Swachh Bharat Mission (100%) designed to provide for toilets for households and Pradhan Mantri Gram Sadak Yojana, meant to build all-weather roads to virtually all unconnected habitations.

Saubhagya, the scheme for electricity connection to all households has also met the target (near 100% electrification) and so has the DBT-LPG scheme. This explains the lower outlays for these schemes in the last couple of years – the Budget allocation for DBT-LPG scheme in FY22 is nearly half of what was provided in FY21. Of course, the subsidy on LPG has also got substantially reduced in recent years, partly depriving the target population of the intended benefit.

Under Jan Dhan scheme, 42.37 crore people have opened no-frills bank accounts, but a section of these are dormant accounts even though during the post-pandemic period, these accounts enabled the government to transfer cash to the underprivileged. For instance, about Rs 31,000 crore was transferred to women Jan Dhan account holders in the last financial year as Covid relief.

Many of the schemes such as MGNREGA, Ujjwala, NSAP and PM Awas Yojana have seen a big jump in both physical and financial achievements in FY21 as additional succour was provided by the Centre to people affected by Covid-19 (see chart).

Even as the spending on these schemes have remained robust leading to rise in revenue expenditure, the Centre has made an effort to increase quality of spending lately by increasing budgetary capital expenditure by 30% on year to Rs 4.39 lakh crore in FY21RE.

For FY22, the Centre has allocated Rs 5.54 lakh crore for capex, which is 26% higher than FY21RE.

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