Budget 2024: Rural jobs scheme may get 47% higher outlay of Rs 88,000 crore

The unusual move came after 95% of the FY24 budgetary outlay of ₹60,000 crore for the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) was exhausted well before the commencement of the winter session of parliament, thanks to a rise in work demand, the official told ET.

Budget News: The upcoming budget for FY2025 is expected to allocate Rs 88,000 crore for the rural employment guarantee scheme, marking a 47% boost from the current fiscal year. The government is responding to the surge in demand for employment and an increase in wage rates.

The rural development ministry has pegged the 2024-25 person-day generation target (called labour budget) at 2.21 billion under the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS), down 27% from the actual level in the previous fiscal.

MGNREGS received additional ₹3,400 crore, raising total allocation to ₹89,400 crore. Person-days exceeded targets. 10% wage hike during 8.4% growth. 'Below normal' 2023 monsoon affected work demand projections.

Sources in the Ministry of Finance said the annual expenditure for the current fiscal year ending March 31, 2024 may rise as much as 30 per cent over the initial budgetary allocation of Rs 60,000 crore.

Total expenditure under the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) - including states' contribution for materials used in the work - stood at Rs 1.05 lakh crore in 2023-24, against Rs 1.01 lakh crore in the previous year, showed preliminary data compiled by the rural development ministry. Erratic monsoon reduced the typical large-scale migration of workers to farm activities in the second quarter of the financial year, experts said.

About 93% of the FY24 budgetary allocation of ₹60,000 crore for the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) has been released, a person familiar with the details told ET. This has prompted the rural development ministry to seek substantial supplementary demands for funds to run the scheme throughout this fiscal year, he said.

The demand for work under the government's rural job scheme, MGNREGS, has seen an unusual trend this fiscal year. While demand usually peaks in the summer months, it has grown rapidly during the monsoon season. Experts believe that erratic seasonal rains have prevented rural workers from migrating to farming, leading them to rely on the MGNREGS for employment.

MGNREGS wages of about ₹35,000-40,000 crore are estimated to have gone into the construction of houses under the PMAY (Gramin) since the scheme was rolled out in November 2016 by revamping the erstwhile India Awas Yojana, said the person. House construction has picked up pace in the last two years, pushing up the MGNREGS wage costs on such an account.

The issuance of sovereign green bonds would be announced in the second half of FY24. The government has already borrowed ₹16,000 crore through such bonds this fiscal year.The borrowing in the first half is scheduled to be over in 26 weekly tranches of ₹31,000-39,000 crore, the finance ministry said on Wednesday.