NEW DELHI: The Centre may increase the outlay for Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) by around 10% over the budget estimate of Rs 86,000 crore for the current financial year, factoring in work demands as well as wage increases, official sources said.
So far in FY25, Rs 70,000 crore or 80% of the annual outlay has been spent under the scheme including Rs 45,624 crore in wages and Rs 20,606 crore on material and skilled wages.
“The additional allocation for the scheme may rise by Rs 9,000-10,000 crore,” an official said, adding that the numbers are yet to be finalised as discussions are still going on the revised estimate for the year.
After work demand by persons touched a high of 37.4 million in May 2024, it moderated to around 19 million each in August and September. However, it started to inch up again in October with a work demand of nearly 20 million. However, on an year-on-year basis, work demand has been on sharp decline in recent months, signalling a revival of rural incomes.
Increased scrutiny of the scheme by the government, which intends to curb wasteful spending is also cited to be the reason for the lower registration of demand.
The average wage rate per day per person has increased by 5% to Rs 247.71 in FY25 from Rs 235.64.
The extra allocation for the scheme won’t impact the government’s overall spending as it could adjust this against savings in other schemes expected for the year.
So far in FY25, 1.78 billion person days work have been generated. In FY24, 3.1 billion person days were generated under the scheme compared with 2.93 billion in FY23 and 3.63 billion in FY22.
While the average wage increase could inflate expenditure to some extent, the Centre is tightening measures to plug leakages in the scheme.
Allegation of rampant misappropriation of funds allocated under the flagship scheme was one of the main triggers for the Centre to stop the scheme in West Bengal.
Amid reports of leakages in the scheme, the NITI Aayog is in the process of appointing a consultant to evaluate the performance of the MGNREGS including adequacy and timeliness of funds, transparency and accountability.
MGNREGS is a Centrally Sponsored Scheme of the Centre but without cost-sharing from states. Analysts have suggested that the states should have skin in the game by bearing some expenditure with the Centre.
Source: The Financial Express
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