Against the revised estimate of Rs 98,000 crore for MGNREGA in 2021-22, the Union Budget 2022-23 has allocated Rs 73,000 to the rural employment scheme. About Rs 18,350 crore are pending liabilities from previous years thus, leaving effective Rs 54,650 crore available for use. This is a systematic way of diluting the public works programme, complain the right to work researchers.
The budget 2022 document shows that the central government has reduced the allocation for MGNREGA to Rs 73,000 crore (budget estimate). Photo: By arrangement
The past two years of the COVID19 pandemic have hit rural livelihoods like never before. Hence, in the Union Budget 2022, there were expectations that the central government would allocate sufficient funds for the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) that guarantees 100 days employment a year to the rural citizens. However, the scheme barely found a mention in the 90 minutes speech of Finance Minister Nirmala Sitharaman on February 1.
The budget 2022 document shows that the central government has reduced the allocation for MGNREGA to Rs 73,000 crore (budget estimate). In the year 2021-22, the revised estimate for the scheme was Rs 98,000 crores. However, the actual spending under MGNREGA for 2020-21 was Rs 111,170 crore.
Thus, despite the pandemic still looming large and unemployment being a major concern, MGNREGA funds for 2022-23 have been reduced by 34 per cent of the last year’s actual expenditure, or 25.5 per cent of the last year’s revised estimates. All through the COVID-19 crisis, MGNREGA has been seen as a glimmer of hope which provided employment to many, and is still in great demand, say Right To Work activists.
“If there is no work available through MGNREGA in rural villages, what will rural workers do? Due to lack of choice, they will have to migrate to other places in search of work. Because of the low allocation, the payments get routinely delayed,” Rajendran Narayanan, an assistant professor at Azim Premji University, Bengaluru, told Gaon Connection. Narayanan has been closely working on the issue of rural livelihoods and is a founding member of LibTech India, an informal group of researchers and activists that work on questions of transparency and accountability in MGNREGA and the Public Distribution System.
The assistant professor went on to say that MGNREGA wages have been very low which acts as a discouraging effect on the worker to take up work under this central act. “So two things combine – you don’t pay them enough, and second, when you do, you pay them so late. This combination discourages workers from taking up MGNREGA work,” he explained.
A recent statement released by non-profit MGNREGA Sangharsh Morcha highlighted that if the government wants to provide legal guarantee of work to all the active job card holding household, which is 99.4 million, then considering the current budgetary estimate of Rs 73,000 crore, it will only be able to provide some 16 days at per person per day average cost of Rs 334.
The statement also highlighted that from the current budget, about Rs.18,350 crore are pending liabilities from previous years thus, leaving effective Rs 54,650 crore available for use.
Highlighting the inadequacy in the annual budget allocation to provide work to all those seeking employment under the programme, Sangharsh Morcha stated, “Every year about 80-90% of the budget gets exhausted within the first 6 months, resulting in heavy slowdown of work on the ground. The government has not been able to provide employment to all active job card holding families due to inadequate budget allocation.”
Calling it a systematic way of diluting the public works programme, Narayanan said, “When workers lose interest in the programme (because of delayed payments), the government would say that fewer people have demanded work so we don’t need as much money and this works as a continuous cycle. That’s what we have seen in the last six years.”
In 2021, half yearly MGNREGA National tracker launched by Peoples’ Action for Employment Guarantee (PAEG) had highlighted that 90 per cent of the allocated budget had been used up within five months of the programme and the remaining funds available could at most cover 13 days of employment per household till March 31, 2022.
PAEG is a group of activists, academics, and members of peoples’ organisations that have been advocating for the MGNREGA since 2004.
The Economic Survey 2021-22 which was released a day before the Union Budget 2022 stated that in financial year (FY) 2021-22 over 87 million individuals and 61 million households were provided work.
Analysing the latest data on demand for work under MGNREGA, the Economic Survey suggested that MGNREGA employment peaked during the nation-wide lockdown in 2020 whereas the demand for MGNREGA work had stabilised after the second COVID19 wave. However, the aggregate MGNREGA employment was still higher than pre-pandemic level.
“For some states like Andhra Pradesh and Bihar, the demand for work under MGNREGA has reduced to below the pre-pandemic levels during the last few months,” the survey noted.
Observing that higher MGNREGA demand may be directly related to the movement of migrant labour i.e. source states would be more impacted. The survey stated that in migrant source states like West Bengal, Madhya Pradesh, Odisha, Bihar, the MGNREGA employment in most months of 2021 was lower than the corresponding levels in 2020.
In contrast, the demand for MGNREGA employment was higher for migrant recipient states like Punjab, Maharashtra, Karnataka and Tamil Nadu for most months in 2021 over 2020, the survey noted.
While the Economic Survey observed that MGNREGA demand in states like Odisha in most months of 2021 was lower than the corresponding levels in 2020, it’s important to noted that in 2021 Odisha’s Chief Minister Naveen Patnaik had written to Prime Minister Narendra Modi and requested him to increase the labour budget of the state, under MGNREGA, to 250 million person days. He also highlighted that Rs 10, 887 million liabilities were pending under the MGNREGA scheme for Odisha.
“With regard to Odisha, there’s definitely a lot of demand for work in the poor states. Whether it’s Odisha, Madhya Pradesh or Chhattisgarh. All of these states, there’s a high demand for work but because of these supply side constraints, they exhaust the labour budget in the first half of the year itself,” said Narayanan.
According to him, ideally there shouldn’t be an exhaustion of MGNREGA budget because this is a work-demand programme. So in spirit, whenever a worker demands, till they reach 100 days, they should get work. So that doesn’t really happen, Narayanan pointed out.
Additionally, Tamil Nadu’s Chief Minister MK Stalin had also written a letter to the PM seeking immediate release of funds under the employment scheme. He stated that the entire amount of Rs 35, 242 million released for the FY 2021-22 by the central government to the state had been fully utilised up to September 15, 2021. “Due to no further release of funds, a wage liability of Rs 11, 781 million has been created up to November 1,” his letter dated November 1 read.