While the Centre insists that the MGNREGS is a demand-driven scheme and additional funds are given when required, no upward revision was made in the ongoing financial year.
| Photo Credit: V. Raju

At a time when the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS), the flagship rural employment programme, is running on a deficit of ₹9,754 crore, there has been no hike in fund allocation in the 2025-26 Budget.

In FY 2025-26 Budget, ₹86,000 crore has been allocated for the scheme, which is same as the budget allocation for 2024-25. While the Centre insists that the MGNREGS is a demand driven scheme and additional funds are given when required, no upward revision was made in the ongoing financial year.

Therefore, Budget Estimate 2024-25, Revised Estimate 2024-25 and the Budget Estimate 2025-26 are the same at ₹86,000 crore. A significant amount of the budget each year is spent in covering the dues of the previous financial year. The pending dues of West Bengal is around ₹7,500 crore. If the issue is resolved this year, the allocated budget will further decrease.

The legislation dictates that the workers have to be paid their wages within 15-days of doing the work. But due to the allocation, the Centre will not be able to meet this deadline. 

Delay in wages

“The ongoing financial year has another three-months to go. The programme is already running on a deficit. This means that for the next three months wages will be further delayed. Significantly, with such low allocation, the scheme will be rationed in the next FY leading to artificial suppression of demand,” Nikhil Dey, Founder Member of Mazdoor Kisan Shakti Sangathan.

The low allocation is directly related to suppression of demand. The Economic Survey had said that the employment was often unavailable when sought. The Act mandates that the worker should be provided unemployment allowance if work is not provided within 15-days of raising the demand. However, the Survey noted that the “work demanded is only reported on the portal when employment is actually provided.” Thus the real demand for the MNREGS work is never captured. 

“The government has repeatedly asserted that it is a demand-driven programme and they appropriately revise the budget to meet the demand. But if that was the case, how do they explain the fact that no additional allocation was made in 2024-25, which is unprecedented? This is reflected in the negative balances reported by most States, showing that funds are running out while demand remains unmet,” Chakradhar Buddha senior researcher at Lib Tech, a consortium of academics and activists.

He also pointed out that the budget allocation also does not factor in inflation. 

New Delhi:

The Rural Development Ministry has approved 56 new Watershed Development Projects that will be undertaken at a cost of Rs 700 crores in the ten best-performing states, the government said on Monday.

In a statement issued here, the ministry said the projects will be undertaken in Rajasthan, Madhya Pradesh, Karnataka, Odisha, Tamil Nadu, Assam, Nagaland, Himachal Pradesh, Uttarakhand and Sikkim.

“Department of Land Resources announces sanction of 56 new Watershed Development Projects at a cost of Rs 700 crores under the ongoing scheme of PMKSY-WDC 2.0 in the 10 best-performing states…,” the ministry said.

“Each project will approximately have an area of 5,000 hectares, but in hill states, it may be lesser. The initiative prioritises visible field impacts by allocating Rs 700 crore to cover approximately 2.8 lakh hectares, ensuring timely recovery of degraded land and efficient utilisation of funds,” the statement said.

“These projects would further help in increasing the income of farmers, addressing land degradation and strengthening climate resilience efforts,” it said.

The Department of Land Resources (DoLR) is implementing the Watershed Development Component of Pradhan Mantri Krishi Sinchayee Yojana (WDC-PMKSY) which aims to develop degraded and rain-fed areas of the country, by undertaking watershed development projects in an integrated approach.

The activities undertaken, include ridge area treatment, drainage line treatment, soil and moisture conservation, rainwater harvesting, nursery raising, pasture development, and livelihoods for asset-less persons.

“The evaluation of the completed projects under WDC-PMKSY 1.0 has revealed significant improvement in groundwater table, increased availability of surface water, improvement in crop productivity and farmers’ income. WDC-PMKSY, through these interventions, seeks to ensure sustainable development through improved natural resource management and better resilience of farmers to climate change,” the ministry said.

In 2021-22, 1,150 projects covering an area of about 50 lakh hectares have been sanctioned at a cost of Rs 12,303 crores under the WDC-PMKSY 2.0.

(Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)

Working under MGNREGS: Women workers begin desilting work as part of the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) at Nidigattu village near Bheemunipatnam in Visakhapatnam district on April 23, 2020
| Photo Credit: DEEPAK KR

From being called a “living monument of failure” to “digging holes,” the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) has long been subject to harsh criticism by the ruling dispensation. While the NDA government hasn’t done away with the UPA’s legacy scheme, payment delays, technological imposition and paucity of funds have left the programme in a state of disrepair.

For instance, the Centre is yet to clear wages worth thousands of crores in West Bengal and Rajasthan. The recently introduced Aadhaar-based payment system (ABPS) will impact close to 80% of workers in Maharashtra who are yet to complete the relevant formalities. Also, the Budget allocated to the scheme was slashed by 33% for FY24.

Despite the steep cut, Union Rural Development Minister Giriraj Singh recently claimed that the allocations were higher than what was given during the UPA regime. Chart 1 shows that the allocation formed only 1.3% of the total budget in FY24, the lowest-ever. The share peaked at 3.4% in FY09.

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From February 1, 2023, payments to MGNREGS beneficiaries were to be made only through ABPS. However, as on February 20, only 44% of the total workers in India were eligible for ABPS. In 14 States, more than 50% of workers were not eligible. In Rajasthan, Uttar Pradesh, Bihar and Maharashtra, where more than 2 crore workers each are enrolled under the scheme, over 60% were not eligible. Chart 2 shows the State-wise share of workers who were not eligible for receiving payments through ABPS as on February 20. States have been divided into four categories based on the number of workers enrolled in MGNREGS.

Rajendran Narayanan, a faculty member at Azim Premji University, said, “Till the workers link their job cards and bank accounts with Aadhaar, they will not be allowed to take up MGNREGA work. That can have serious consequences because it takes time to do this process and this is the peak season of MGNREGA. Also, rectifying errors in the Aadhaar-based payments is nearly impossible for the workers and field officials.”

MGNREGS also suffers from inordinate delays in payment of wages. The payment process has two stages. Stage 1, which is the States’ responsibility, involves creating a Funds Transfer Order with worker details. This is sent in digital format to the Centre. Stage 2, which is the Centre’s responsibility, involves processing the Funds Transfer Orders and transferring the wages to the worker’s account. Chart 3 shows the wages (in Rs. crore) that were not yet processed by the States and the wages that were yet to be cleared by the Centre as on February 25. For instance, in Rajasthan, nearly Rs. 78 crore or 1.5% of total transactions is yet to be processed at the State level, while the Centre is yet to clear dues worth Rs. 1,138 crore or 18% of all transactions. In West Bengal, close to 98% of transactions worth Rs. 2,897 crore are pending with the Centre.

Further, several States such as West Bengal, Madhya Pradesh, Tamil Nadu, Andhra Pradesh, Maharashtra and Nagaland are running negative balances with payments pending for wages and material. This makes it difficult for them to take up new work. At the same time, they have pending payments ranging from Rs. 200 crore to over Rs. 1,000 crore. In Gujarat, Telangana, Bihar, Rajasthan and Uttar Pradesh, while the existing balance is positive, the pending payments far exceed the balance, which if cleared, will push the States into negative territory. Chart 4 shows balance remaining with States and payments that are due in Rs. crore.

Source: MIS reports, budget documents and the Ministry of Rural Development

nihalani.j@thehindu.co.in

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