If needed, will allocate more for NREGA, says FM Nirmala Sitharaman

Union Finance Minister Nirmala Sitharaman on Friday said the Centre would provide more funds to the rural job scheme under the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) beyond the budgeted allocation for FY24 if there was need to do so.

This came amid criticism from the Opposition that the Centre was cutting funds to the flagship scheme. “(The) NREGA is a demand-driven scheme. Whenever there is an increase in demand, we have provided and will provide the sums required,” Sitharaman said, adding that the Budget Estimate for the scheme for FY24 factored in an economic recovery and a “massive increase” in the Pradhan Mantri Awas Yojana (Rural) and Jal Jeevan Mission.

The Revised Estimate (RE) for the MGNREGA scheme this fiscal year (FY23) stands at Rs 89,400 crore as against the BE of Rs 73,000 crore.

The BE for FY24 is Rs 60,000 crore.

“We will provide the amount if there is an increase in FY24 (compared to the BE),” Sitharaman said.

Earlier this week, Chief Economic Advisor V Anantha Nageswaran had said the Centre’s push towards rural housing and water supply infrastructure would lead to a kind of job creation in rural areas that justified the lower allocation to the rural employment guarantee scheme.

“One of the reasons why allocation for the MGNREGA was lowered is that there is a much larger substantive increase in allocation in particularly the rural component of the PM Awas Yojana and Jal Jeevan Mission. The expectation is that rural workers would be able to find jobs in these projects and hence there will be lower demand for MGNREGA work,” Nageswaran had said.

Replying to the debate on the Budget in the Lok Sabha, Sitharaman said the new personal income-tax regime, which offers a rebate on an annual income of up to Rs 7 lakh, would leave the salaried class with a higher disposable income, and that the Budget had struck a delicate balance between growth and fiscal discipline. She said the new regime was “very attractive” because the tax exemption limit had been increased to Rs 3 lakh from Rs 2.5 lakh earlier. Besides, a standard deduction of Rs 50,000 too has been allowed under the scheme.

Under the revamped tax regime, which will be effective in the next fiscal year, the tax slabs are the following: No tax on an income up to Rs 3 lakh; income between more than Rs 3 lakh and Rs 6 lakh will be taxed at 5 per cent; between more than Rs 6 lakh and Rs 9 lakh at 10 per cent; between more than Rs 9 lakh and Rs 12 lakh at 15 per cent; between Rs more than 12 lakh and Rs 15 lakh at 20 per cent; and more than Rs 15 lakh at 30 per cent.

“The Budget astutely manages the needs for India’s development imperatives within the limits of fiscal prudence. We have made sure that fiscal prudence is maintained within the glide path,” Sitharaman said.

Sitharaman said the government chose the capital expenditure route to revive the economy because of its greater multiplier effect.