Work demand under MGNREGS at 4-month high, FY23 funds almost exhausted

Demand for work under India’s biggest anti-poverty scheme increased to a four-month high in November, government data showed as budgetary support for it is almost exhausted this financial year.

More than 22.5 million people applied for work under the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) in November, the highest since August. As many as 25.2 million people applied in July and 19.1 million in August, according to the Rural Development Ministry.

Household demand for the scheme—members of a family seeking work—rose to 18.5 million in November, the highest since August, when the number was 15.9 million. It was 20.4 million in July. The demand for work fell sharply between June and July from 43.2 million to 25.2 million. It has stayed below 22 million ever since.

The budgetary allocation for MGNREGS has already been exhausted, if pending liabilities for the financial year are included.

"The budget estimates this year were low especially given the increased demand for MGNREGS during the pandemic. If you see the data as of today, with more than a quarter of the fiscal year left we have already spent Rs 74,724 crore (including the pending liabilities due)—i.e. more than the original estimates," said Avani Kapur, senior fellow at the Centre for Policy Research (CPR), an independent group.

In Budget 2022, the Centre allocated Rs 73,000 for the scheme. This was 25.5 per cent lower than the revised budget estimates of Rs 98,000 crore in FY22.

As of December 2, the total expenditure of the scheme, including payments due, stood at Rs 72,724 crore. Even without considering the dues, the total expenditure stood at Rs 67,726 crore, over 93 per cent of the budgetary allocation.

"The [upcoming] Budget (next year) should take into account the pending liabilities, demand pattern as well as the fact that notified wages will rise in April and provide adequate funds," Kapur said.

Business Standard reported on November 25 that Centre has formed a panel headed by a former bureaucrat to undertake a comprehensive review MGNREGS's expenditure pattern, governance, and administrative issues to plug the loopholes and leakages.

A separate report by PTI said the rural development ministry has sought additional funds of about Rs 25,000 crore for the scheme for FY23.

Kunal Sood, partner at Grant Thornton Bharat, recommended a focus on producing productive assets under the scheme and empowering women through it.

"We recommend a greater focus on the creation of productive assets and ownership of these assets by the community, especially women SHGs/POs," he said.

"[Focus on] Assets that add a secondary income source like pack houses, storage, vermicompost, fish ponds, poultry farms, pig farms, etc and Convergence with SHGs/FPOs should definitely be a priority," Sood said.