MGNREGS will need Rs 32K-crore more aid to meet demand: Experts

But a supplementary budgetary support of Rs 50,000 cr would be appropriate to fulfil all requirements of this year: Activists

With demand for work under the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) continuing to be robust, civil society activists and experts believe an additional financial support of at least Rs 32,000 crore is required over and above the budgeted Rs 73,000 crore this fiscal year.

Considering that the demand for work is expected to rise further in the January-March period as has been the norm in the past years and also around Rs 17,500 crore has been pending from last year at the start of the current fiscal year, activists said to fulfil all requirements of this year, a supplementary budgetary support of Rs 50,000 crore would be appropriate.

In both scenarios, if the Centre decides to provide additional financial support for the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) to meet rising demand and address the need for meeting financial requirements of states, the total allocation for the scheme would once again top Rs 1 trillion.

In 2020-21, around Rs 1.11 trillion was allocated for MGNREGS to meet rising demand for work under the scheme from migrants returning to villages from cities impacted by the Covid-19 lockdown.

Reports peg the quantum of additional financial support at around Rs 25,000 crore.

“If anything less than Rs 50,000 crore is allocated by way of supplementary grant for MGNREGS, it will once again get exhausted by December-January, given that pending payments are mounting in most places because existing funds have got exhausted,” said Debmalya Nandy of the NREGA Sangharsh Morcha.

In 2021-22, the Centre had approved a labour budget of around 2.84 billion persondays, based on inputs provided by states. Of this, around 2.29 billion persondays have been generated till November 8.

On average, 330 million persondays of work per month have been generated between April and October.

If the same pace of work generated is maintained for the remainder part of the year, an additional 1.65 billion persondays of work will be generated between November and March. This will then take the total approved persondays to around 3.94 billion persondays.

The average cost per person per day is around Rs 295, which means nearly Rs 32,450 crore will be needed to meet demand.

This number could go up to Rs 50,000 crore as a significant portion of this fiscal year’s allocation of Rs 73,000 crore is spent on clearing previous year’s dues of nearly Rs 17,500 crore.

Because of fund crunch, as on November 9, around Rs 8,808.24 crore is pending and 22 of 35 states and Union Territories have pending dues from the Centre on MGNREGS.

“If Centre released Rs 25,000 crore now as is being talked about, Rs 8,808.24 crore will go towards clearing pending dues. This will leave around Rs 16,200 crore to meet fresh demand — this is grossly inadequate and will lead to further delay in wage payments,” said another civil society activist.

Several state chief ministers have started approaching the Centre to clear pending payments or else will have to cut back on work. How far and how much the Centre responds remains to be seen.