The Rs 60,000 crore allocated to the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) in the Budget for next year is the lowest allocation since 2016-17.
A straight comparison of this year’s allocation of Rs 60,000 crore with the current year’s revised outlay of Rs 89,400 crore shows a fall of 33 percent. However, when allocations since 2008-09, when the scheme was rolled out nationally, are adjusted to inflation (2011-12 prices) using the same ratio used to calculate real GDP, the reduction is even sharper (35 percent).
In real terms the highest jump in allocation was not surprisingly in 2020-21, the Covid year. There has been a steady reduction in allocation since then for three consecutive years bringing this year’s budget outlay to just 44 percent of the allocation in the Covid year. This is the biggest cut since the expansion of the scheme in April 2008 to cover all rural areas.
According to the MNREGS website, the average number of days of employment provided per household so far in 2022-23 is about 43. The average in the five years before Covid was roughly 48 days of work per household.
The current allocation of Rs 60,0000 crore would provide work for an average of only 32 days per household if we were to assume the same number of households (5.8 cr) are provided work as in 2022-23 at a wage rate of Rs 229 per person per day (5.1 percent increase over last year’s wage in line with the average increase in previous years) and same ratio of wages, material and administrative cost as last year.
Conversely, if work was provided for an average 48 days, then about 2 crore fewer households would get work. Either way, with just the current allocation, the number of households or average number of days would be the lowest ever. However, since 2015-16, the government has regularly augmented the budgeted allocation through supplementary budgets.
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