BUDGET 2023: Govt must pay out Rs. 1.8 lakh crore for 100 days of MNREGA jobs

Budget 2023: The government will need to spend nearly to Rs.1.8 lakh crore in the upcoming budget 2023 to guarantee 100 days of employment to every household signed up for the Mahatma Gandhi National Rural Employment Guarantee Scheme (MNREGS).

This is possible only if the number of households opting for the scheme remains at the current level.

“Actually, the outlay has steadily decreased since the Covid era boost to less than half this amount. In the five years prior to the Covid years (2015-16 to 2019-20), the government only offered 48 days of work per household on average “as per report.

During the first wave of Covid-19 pandemic, the spending on MNREGA was Rs 1.1 lakh crore. This was the highest annual spend on the scheme so far. In 2021-22, the spending reduced to Rs 98,000 crore. In 2022-23, the allocation stood at Rs 89,400 crore with the addition of the supplementary grant of Rs 16,400 crore to the original budgetary allocation of Rs 73,000 crore.

The Niti Aayog report of 2020 on the impact of the scheme on household income and poverty alleviation had called it (MNERGA) a “powerful instrument for inclusive growth in rural India.”

The total number of days allotted for employment may occasionally be decreased. Any increase in days would necessitate a significant improvement in allocation. For instance, providing even 60 days of work would require about Rs 1.1 lakh crore while providing work for 80 days would require roughly Rs 1.5 lakh crore.

Knowing how to achieve the goal of Rs. 1.8 lakh crore is crucial. The average annual wage growth over the past five years has been 5.1%. If this holds true for the following year, the current year’s average wage of Rs 217.7 per person per day would increase to Rs 229 in the following financial year.

If the number of households receiving employment stays the same, the cost of wages alone will be close to Rs. 1.3 lakh crore. The entire cost to the central government would exceed Rs 1.8 lakh crore with the inclusion of material and administrative costs at the same ratio as this year.

Under the plan, each household must receive an average of 48 days of work. According to the figures in a report, “the amount would need to be just a little bit more than Rs 87,500 crore for the following year. Allocations must, however, also account for unpaid wage bills from the prior year.”

“In January 2022, the pending bill accounted for Rs 3,358 crore. Considering a similar pendency, MNREGA spending would have to be more than what has been allocated in 2022-23,” report stated.