Allegation of rampant misappropriation of funds under the flagship Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) may have cost West Bengal over Rs 22,000 crore in assistance under the Centre’s flagship scheme during FY23-FY25. The bulk of these funds have likely got redistributed among Tamil Nadu, Uttar Pradesh, Bihar and Maharashtra.
These four states got an additional Rs 13,000 crore during the three years, even though the Centre’s annual spending on the scheme largely remained stable around Rs 86,000-88,000 crore. The outlay for FY26 is Rs 86,000 crore.
Release of funds to West Bengal has been stopped since March 9, 2022, under Section 27 of the MGNREG Act due to noncompliance with the central government directives. In FY22, the state got 7,508 crore.
There was no saving in the scheme, even though a large state like West Bengal did not get funds in the last three years, an official said, adding that the funding under the scheme may rise when the state becomes eligible to get funds again.
The highest the states had drawn was during Covid in FY21 at about Rs 1.1 lakh crore, when rural distress was real. Since then, it has started to decline as economic activity picked up and steps were taken to plug leakages. The spending was Rs 96,812 crore in FY22, Rs 88,290 crore in FY23, Rs 88,217 crore in FY24 and Rs 85,771 crore in FY25.
Tamil Nadu, which received Rs 9,707 crore in FY23 under the scheme, saw its pie grow to Rs 12,603 crore in FY24, amid allegations that the scheme was used to fund state projects or machines were used for projects instead of labour. Tightening of the norm, saw its share falling to around Rs 7,600 crore in FY25.
Bihar’s share gradually grew from Rs 5,407 crore in FY22 to over Rs 6,700 crore in FY25 while Uttar Pradesh’s share rose from Rs 8,510 crore to Rs 10,269 crore in FY23, before declining to around Rs 9,700 crore in FY25. Maharashtra, which was one of the large states availing less under the scheme, saw its share rose from Rs 2,056 crore in FY22 to Rs 4,900 crore in FY25.
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.