GoI's 'derisively low' budget allocation to further weaken rural jobs lifeline NREGA

Counterview Desk
Well-known advocacy group, NREGA Sangharsh Morcha, expressing its “deep disappointment” at what it calls “ridiculously low budget allocation for implementing the National Rural Employment Guarantee Act (NREGA), has said that the decrease of the rural development budget by 12% suggests the Government of India (GoI) has once again failed millions of its rural citizens who depend on the rural employment guarantee programme for meeting their life needs.
Asking GoI to “take necessary actions within a month to allocate adequate funds for the programme”, a statement by the NGO says, “Since 2015-16, the annual budget allocation has never been sufficient to provide work to all those seeking employment under the programme. In fact, every year about 80-90% of the budget gets exhausted within the first 6 months, resulting in heavy slowdown of work on the ground.”

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Notwithstanding the rural distress, implementing the National Rural Employment Guarantee Act (NREGA) is a legal obligation of the Central government. However, the demand-driven nature of the Act has been repeatedly stifled in letter and spirit. By severe rationing of funds, it has been made a supply driven programme.
February 1 was NREGA diwas, and while we are supposed to be celebrating the idea of rural employment guarantee, we are deeply pained that the programme is systematically undermined by ridiculously low budget allocation.
The total allocation outlay for the ministry of rural development has decreased by 12% in the Union Budget 2022-23, adding on to the existing distress of the rural economy. While for NREGA, despite revised estimates for the current financial year coming in at around Rs 98,000 crore, the budgetary allocation has stayed the same as last year, at Rs 73,000 crore. Out of this, about Rs 18,350 crore are pending liabilities from previous years. Therefore, only about Rs 54,650 crore is available for next year.
If the government wants to provide legal guarantee of work to all the active job card holding households, which is 9.94 crore, then considering the current budgetary estimate, it will only be able to provide some 16 days at per person per day average cost of Rs 334.
Since 2015-16, the annual budget allocation has never been sufficient to provide work to all those seeking employment under the programme. In fact, every year about 80-90% of the budget gets exhausted within the first 6 months, resulting in heavy slowdown of work on the ground. The government has not been able to provide employment to all active job card holding families due to inadequate budget allocation.
It is well known that NREGA has served as a lifeline for millions of distressed households in the last couple of years and helped rural India cope with the unprecedented unemployment caused by the unilaterally imposed national lockdown in FY 2020-21. It has almost worked as a vaccine for unemployment in rural India which is still struggling to recover from enormous loss of lives and livelihoods.

NREGA has worked as a vaccine for unemployment in rural India which is still struggling to recover from enormous loss of lives and livelihoods

While in FY 2020-21 the Central government ended up spending Rs 1.11 lakh crore for a record 11 crore workers from 7.5 crore households who worked under NREGA, in FY 2021-22, a 34% reduction in budget allocation caused much lesser employment generation on ground.
The government later on added a supplementary budget of Rs 25,000 crore in view of the growing need for work across rural India. As of now 9.75 crore workers from 6.74 crore households have worked in NREGA this financial year despite frequent interruptions in implementation due to great delays in fund release from the centre.
We had recommended in our pre-budget note that no less than Rs 3.62 lakh crore will be needed to ensure maximum employment generation for all active job cardholding families. The Government has once again failed millions of its rural citizens who depend on the rural employment guarantee programme for meeting their life needs.
We, members of NREGA Sangharsh Morcha express our deep disappointment at this ridiculously low budget allocation for NREGA and we urge that the central government should take necessary actions within a month to allocate adequate funds for the programme.
We also expect quick action to strengthen social audits across the nation and to ensure that independent social audits are regularized in all states, findings are put in public domain and timely actions are ensured against each irregularity.

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