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NREGA budget amount "illegally squeezed" by 25% in 17-18, 30% in 16-17; Rs 80,000 crore needed in 18-19: Top NGO

By Our Representative
India’s top advocacy group fighting for the workers employed under the National Rural Employment Guarantee Act, NREGA Sangharsh Morcha (NSM), has insisted that any budget less than Rs 80,000 crore would be “insufficient to meet even the projected demand for work timely payment of wages.”
In a statement, the advocacy group says, “As we await the budget allocations for FY 2018-19, NREGA is facing another monetary drought with liabilities for wage and material payments mounting every day.”
Calling it a “demand driven law, which means that money should be provided as per demand”, NSM has regretted not only “this is not happening”, the actual allocation of FY 2017-18 of Rs 48,500 crore “is long exhausted with expenditure having crossed Rs 50,000 crore, and more than two months still left.”
“While an increase in allocation for FY 18-19 is expected, the total amount required needs to be seen in context, not simply as an increased allocation”, NSM insists.
According to the advocacy group, “It is pertinent to recall that 25%, or close to Rs 12,000 crore out of the current ‘record’ allocation went to pay off last year’s dues. For FY 17-18, pending liabilities are already about Rs 5,000 crore and is bound to rise in the next two months.”
It adds, “The budget for FY 18-19 will have to deduct pending liabilities at the end of this year, to present a true picture of funds available for employment next year. Enough funds need to be made available to break this cycle of pending liabilities at the end of financial years. Only then can timely payment of wages actually be made.”
“As per sample independent studies”, NMS says, “The actual wages paid on time in 2017-18 is likely to be around 32% instead of the figure of 85% presented by the Government of India.”
It underlines, “Further increasing costs, both for wages and material need to be taken into account. NREGA wage rates need to be brought in line with State Minimum Wages as per constitutional values, and as various Ministry of Rural Development (MoRD) committees have recommended.”
“At the very least”, NMS believes, “Wages should be indexed to inflation as per the Consumer Price Index of Rural Labour (CPI-R).”
MNS points out, “The insufficient budgetary allocation results in the MoRD using various illegal and coercive methods to cut employment and squeeze expenditure on the NREGA, thereby violating various provisions of this act with impunity.”
MNS says, things began deteriorating after the NDA came to power in 2014, with several civil society groups starting to pointing out the pernicious manner in which funds were being squeezed for NREGA. An illegal concept called ‘approved labour budget’-- contrary to the spirit of the Act – was floated. Thus, “in FY 17-18, the projected labour budget was reduced by 25% from Rs 288 crore persondays to 215 crore persondays.”
“Calculated at an average cost per day of Rs 240, this amounts to huge deficits in the allocated amount”, says MNS, adding, “Moreover, funds are not made available to state governments for even the approved labour budget.”
Further, it says, the Government of India “has given itself further discretion to withhold funds to state governments by introducing mid-term reviews, internal audit reports and mother sanction order” that strongly undermine the Act.”

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