In poll year, trend reverses, funds up for MGNREGS

New Delhi: With the parliamentary polls likely to take place in April and May this year, Prime Minister Narendra Modi’s government on Thursday reversed the trend of the past few years of slashing funds earmarked for the rural job scheme and instead proposed to raise the allocation for the programme in 2024-25 by around 43 per cent.

The overall budgetary allocation for the Ministry of Rural Development was proposed to be raised from Rs 1.57 lakh crore in 2023-24 to Rs 1.77 lakh crore in 2024-25.

Noting that it had reached close to the target of building three crore dwelling units under the Pradhan Mantri Awas Yojana (Grameen), the government also announced that it would provide funds for the construction of two crore additional houses for the poor families in the villages over the next five years.

The government earmarked Rs 86000 crore for the implementation of the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) in 2024-25, raising it by Rs 26000 crore from the allocation of Rs 60000 crore in the previous financial year. The Revised Estimate for the scheme in 2023-24, however, went up to Rs 86000 crore. The finance minister proposed to keep the allocation for the scheme for the coming financial year at the same level as the revised estimate of the current year.

The MGNREGS – mandated by the Mahatma Gandhi National Rural Employment Guarantee Act – is a demand-driven programme designed to guarantee at least 100 days of wage employment in a financial year to every rural household having adults ready to do unskilled manual work. The scheme was launched on February 2, 2006, and was often highlighted by the erstwhile United Progressive Alliance (UPA) government as a programme that legally guaranteed minimum livelihood security to the rural population, contributed to bringing up rural wages, lessened distress migration and empowered weaker sections.

The government had allocated Rs 73,000 crore for the scheme in 2022-23, while the actual expenditure had stood at Rs 90,805 crore.

The scheme had provided a safety net for the rural population during the pandemic, compensating for up to 80 per cent of income loss caused by shutdowns imposed to contain Covid-19. The actual expenditure for the scheme in 2020-21 and 2021-22 stood at Rs 1.11 lakh crore and Rs 98467.85 crore respectively.

The BJP-led government had drawn flak when it had slashed allocation for the scheme for the 2023-24 to Rs 60000 crore.

“Despite the challenges due to (the) COVID, implementation of (the) PM Awas Yojana (Grameen) continued, and we are close to achieving the target of three crore houses,” Finance Minister Nirmala Sitharaman said while presenting the Interim Budget for the 2024-25 financial year. “Two crores more houses will be taken up in the next five years to meet the requirement arising from the increase in the number of families.”

The BJP-led government restructured the rural housing scheme, Indira Awas Yojana, into PMAY(G) and relaunched it in April 2016. It was aimed at providing a ‘pucca’ house, with basic amenities, to every family that either did not have a dwelling unit to live in or lived in a ‘kutcha’ and dilapidated house.

The government had a target of building 2.95 crore households by March 2024 under the scheme. It has so far completed the construction of 2.55 crore houses across the country.

Sitharaman on Thursday allocated Rs 54,500 crore for the implementation of the PMAY(G) in 2024-25. The funds earmarked for the scheme would be spent on the construction of some of the additional two crore houses that the government promised to build over the next five years. She had allocated Rs 54,487 crore for the rural housing scheme in the Union Budget for 2023-24. The revised estimate for the year stood at Rs 32,000 crore, around 41per cent of the allocated amount for the financial year that would end in March 2024.