Work demand under rural jobs scheme rises in H1

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.

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In a letter to states, the ministry of rural development has asked them to try and ensure that this exercise is over by May end, a senior official told ET. The government has decided to make the Aadhaar-Based Payment System (ABPS) compulsory for settling wages under the scheme from July 1.

Person-days generated under the scheme totalled 1.11 billion during the first quarter of this fiscal year, against about 1.14 billion and 1.16 billion in the corresponding quarters of FY23 and FY22, respectively, according to an analysis by the rural development ministry.Suspension of MGNREGS work in West Bengal following alleged fund diversion contributed to the decline, experts said.

In reply to a question on the MGNREGS funds being exhausted, Minister of State for Rural Development Sadhvi Niranjan Jyoti said the Union government has released Rs 66,629 crore to states for wage, material and administrative components under the scheme till November 29.

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.

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.

Nearly 95% of the budgetary allocation for FY24 has already been released. The additional funds will be included in the first batch of supplementary demands for grants and will bring the total outlay for the scheme closer to last year's level of ₹90,000 crore. The government aims to maintain its fiscal deficit target of 5.9% of GDP by cutting wasteful expenditures and reallocating savings.

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.

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.