Budget 2016: boost likely for job schemes

Also for other programme impacting the non-urban economy, in the wake of two years of partial drought

The Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) seems likely to get its highest budgetary allocation since its launch a decade before.

This allocation for 2016-17 could cross the previous highs of Rs 40,100 crore in the 2010-11 Budget and Rs 40,000 crore in 2011-12, by then finance minister Pranab Mukherjee. Actual spending on the scheme for those years were much lower. In the 2015-16 Budget, finance minister Arun Jaitley had allocated Rs 34,699 crore and then gave an additional Rs 8,000 crore in the monsoon session as a supplementary grant.
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Flagship rural job scheme in the previous government, it continues to find resonance under the present one, which sees pressing need to boost rural consumption after consecutive years of poor rain.

"It is the agriculture sector and the rural economy which has been a headwind for overall economic growth," said a senior government official. The person said MGNREGS was one of the many rural-focused schemes where the government was looking at increasing the spending. In the December review, Chief Economic Advisor Arvind Subramanian had cut the Gross Domestic Product growth forecast for the year to 7-7.5 per cent from 8.1-8.5 per cent, citing agricultural slowdown as a prime reason.

As reported last week. the government is also considering linking MGNREGS with the Pradhan Mantri Krishi Sinchai Yojana, to provide labour for various irrigation projects.

The government's views have also been shaped by the fact that there is immense demand for the scheme, with the rural affairs ministry asking Rs 20,000 crore extra in the winter session as a supplementary demand for grants.

Budget 2016-17 could also see a significant increase in allocation to programmes like the Pradhan Mantri Krishi Sinchai Yojana, Rashtriya Krishi Vikas Yojana, Pradhan Mantri Gram Sadak Yojana, and the one to provide's 140 million farmer families over three years.

  The idea is to boost the overall rural economy, hit by consecutive droughts, through increased public spending. The schemes mentioned above have seen more spending by the present government than its predecessor one did. Some other schemes where this is true are the one to provide electricity to rural households (renamed the Deen Dayal Upadhyay Gram Jyoti Yojana) and the food security scheme. There has also been increased spending on the Aadhaar digital identity programme.