Money to revamp MGNREGS admin largely unspent

While most states have utilised about 80 per cent of overall allocations under the flagship Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS), none has been able to utilise even half the funds slotted for administrative expenses. Underlining that the recurring hurdle of poor efficiency in the scheme is not due to lack of funds.

The Union ministry of rural development, as a part of reforms in the MGNREGS, had increased the provision for administrative costs to six per cent of the total allocation last year, up from two per cent earlier. The increase in allocation was slated as very necessary, to assist development of infrastructure, upgrade of technology and enhancing human resources. Technology upgrade includes the ambitious banking correspondent model and the biometric identification model, both expected to dramatically reduce delay in payment of wages and the involvement of middlemen. However, such reforms continue to be a distant dream.

“The administrative costs are very important because they are used for improving the knowledge base like technology, infrastructure, etc. With improvements in these, problems like delayed payments can be reduced,” said Planning Commission member Mihir Shah.

The reason behind the underutilisation, says Shah, is the absence of officials at levels which channelise the money. “The scheme suffers from a major human resource constraint and it is the reason why the administrative set-up is not developing as it should,” he adds.

The latest figures show that important states like Bihar, Uttar Pradesh and Rajasthan (with 37 per cent, 41 per cent and 23 per cent utilisation, respectively) have been unsuccessful in using even half of the increased fund support. The overall utilisation of administrative funds for all states is around 37 per cent, leaving around Rs 650 crore (for the current financial year) unspent.