On Government Slashing Rural Jobs (NREGA) Funds, Top Officer Explains

In Budget 2023, one of the biggest moves by the government was to slash the allocation for the rural jobs scheme MGNREGA despite considerable demand for work. Many other social welfare schemes have also been assigned a pared-down budget.

The allocation for MGNREGA (Mahatma Gandhi National Rural Employment Guarantee Act) has been reduced to Rs 60,000 crore, the lowest in four years. It is also the second straight budget cut for the scheme after a 25 per cent slash in the previous Budget.

This, despite heavier demand for jobs under the scheme that offers 100 days of employment to each rural household in the country.

Chief Economic Adviser V Anantha Nageswaran told NDTV that the allocation for MGNREGA has been reduced partly because more funds have been assigned to the Prime Minister's rural housing scheme and the Jal Jeevan Mission to provide safe drinking water to all homes in rural India by 2024.

"One of the reasons why on paper the allocation for MGNREGA is lower is because there is a much higher substantive increase in the allocation to PM Awas Yojana (Grameen) and the Jal Jeevan Mission," Mr Nageswaran said in an interview with NDTV.

"Naturally, this expanded expenditure cannot be undertaken without deploying more people. So the expectation is that the rural workers would be able to get jobs in these projects because when you construct homes, you need people to construct homes. Therefore, people who would be looking for wage guarantees would be absorbed in this programme and if they don't get absorbed, this is a demand-based programme and we can accommodate them through higher allocations to the MNREGA."

Mr Nageswaran said the government expected the demand to be lower for rural jobs because workers were likely to return to the cities.

"We expect the economy to grow by a nominal growth of 10%. That will see rural labour migrating back to urban India and finding jobs. So, both this factors put together have led us to expect that this coming financial year, the demand for MNREGA will be lower. Should the demand turn out to be higher than we expect, then it will be provided for," said the top economic advisor.

The allocations for the PM-KISAN scheme for farmers, the midday meal scheme and the Minority Welfare ministry have also decreased.

"It is not the allocation. We are focusing on effective and efficient implementation. The allocation for PM-KISAN has been revised because we wanted efficient allocation," Mr Nageswaran said.