Budget 2017: Arun Jaitley’s numbers on MGNREGS not the whole truth

​FM said ​₹48,000 allocation was the ‘highest’ for the scheme, what he chose not to say was that the revised estimate for 2016-17 was already ​₹47,500 crore

Photo by Vijay Kumar Joshi/PTI  
Photo by Vijay Kumar Joshi/PTI

NH Economic Bureau

Sometimes numbers may not really speak the whole truth. Finance Minister Arun Jaitley said Union Budget 2017-18 allocation of ₹48,000 crore was the “highest ever allocation” for the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) in his budget speech. That, he declared, was an increase from ₹38,500 crore allocated for the scheme in the previous Budget.

But is the hike actually that substantial? Not really.

“While the Finance Minister did make the ‘highest ever’ allocation, what he failed to mention was that in the previous financial year the revised estimate for NREGA was ₹47,499 crore—which is much higher than the budget estimate of ₹38,500 crore,” says economist and activist Reetika Khera from IIT Delhi. “Further, once we factor in inflation and look at the change in real terms, there is hardly any increase over the previous year's revised estimates,” she added.

MGNREGA—that assures 100 days of employment every year on demand—is not just about fund allocation but how resources are made available to the states so that work is provided on demand.

“At present, 54% of MGNREGS wage payments continue to be delayed. With pending liabilities already piling up, the situation is likely to get worse in the next two months as budget releases will only be made in April.”
Aruna Roy

“As of today, 22 out of 34 states have negative balances. As per the Rural Development Ministry’s own data, a total of ₹3,469 crore in pending liabilities have already piled up, even as they have spent 93% of the funds available for this financial year,” says leading social activist Aruna Roy in a statement representing the NGO, Mazdoor Kisan Shakti Sangathan. “This is likely to dramatically go up over the next two months, as traditionally demand for work has peaked during this season.” Roy adds.

In addition to the above mentioned liabilities, going by the ministry’s indicative labour budgets, even to implement the approved budget for the months of February and March this year, nearly ₹10,013 crore would be required—at the average cost per person day of ₹228. “This means that we would end the year with close to ₹13,482 crore in pending liabilities, and a budgetary allocation that has not even kept pace with last year’s amount in real terms,” says Roy.

The Supreme Court order has emphatically stated that delayed wages were unacceptable and a violation of the rights of workers. Yet this continues with impunity. “At present, 54% of the wage payments continue to be delayed,” says Roy. “With pending liabilities already piling up, the situation is likely to get worse in the next two months as budget releases will only be made in April,” she adds.

This is not good news for the many rural poor, who have been hit hard by demonetisation, and depend on the MGNREGA to provide them succour.

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Published: 01 Feb 2017, 9:03 PM