With the extra allocation of Rs 16,000 crore in the first supplementary demand for grants almost exhausted, the Centre may provide another Rs 12000-14000 crore for the flagship Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) in the revised estimate for the current fiscal in the budget on February 1, sources told FE.
The Centre has so far released Rs 70,000 crore or 92% of the Rs 76,143 crore provided in FY24 (Rs 60,000 crore in the Budget and Rs 16,143 crore in the supplementary in December). For the whole of FY24, the total outlay for the scheme would likely be Rs 88,000 crore to Rs 90,000 crore.
As against the availability of Rs 81,268 crore (including some writeback of funds from the previous year) as of January 5 of the current fiscal, the expenditure/releases stood at Rs 83,303 crore, or 102.5% of the available funds for the MGNREGS.
Officials said fund availability was not an issue in the demand-driven scheme and additional funds through advances could be provided as and when required, to meet actual expenditure in the scheme.
Rampant misappropriation of funds allocated under the flagship scheme is one of the main triggers for the Centre to make a five-year-low provision of Rs 60,000 crore in the FY24 budget for the jobs programme.
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.
The extra allocation of up to Rs 30,000 crore (including first supplementary) for the scheme won’t impact its fiscal deficit due to substantially higher tax revenues and non-tax revenues expected over the budget in FY24. Also, there would be savings in many schemes, as many departments are unlikely to fully spend funds allocated to them for the year.
So far in FY24, 245.41 crore person days work have been generated and the number could touch 294 crore by March, the same as in F323.
According to official data, month-wise work demand has moderated from 337.18 crore in June to 176.75 crore in November 2023. It rose marginally to 199.44 crore in December.
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 10% on wages on account of the deletion of duplicate, fake/non-existent, ineligible beneficiaries till March 2022.