Rs. 10,000 crore aid for NREGS released by Finance Ministry

The Finance Ministry has granted Rs. 10,000 crore in urgent assistance to meet unexpected increased expenditure under the rural job guarantee plan till the first batch of supplemental demands for grants is approved by parliament at its next session.

According to the sources, the extraordinary action came after 95% of the FY24 budgetary investment of Rs. 60,000 crore for the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) was spent well before the winter session of parliament began.

The immediate funds, which were handed to the rural development ministry last week, will be part of the additional Rs. 28,000 crore that could be allocated for the project in the first batch of supplementary demands for grants for the Financial Year 2024, he said.

The government has yet to declare the dates for parliament’s winter session.

Due to increased job demand, the rural development ministry requested additional cash for the rural employment initiative at a pre-budget meeting in October.

Despite initial government estimates of a reduction in demand, more people sought work under the MGNREGS till October this financial year than the previous year.

According to analysts, this is primarily owing to an unusual monsoon that prevented the usual migration of work to farming and a tentative industrial rebound. Despite a 10.3% increase in August, industrial output increased 6.1% in the first five months of the current financial year, compared to 7.7% the previous year.

Wage increases of up to 10.4% under the MGNREGS also kept programme expenditures high.

Furthermore, a predicted transfer of personnel to initiatives such as rural housing and water, which saw an increase in the FY24 financial allocation, did not occur. MGNREGS work demand has remained notably strong since the pandemic’s breakout in 2020.

The MGNREGS outlay in FY24 was reduced by one-third to Rs. 60,000 crore from a revised estimate of Rs. 88,400 crore in FY23. Finance Minister Nirmala Sitharaman, on the other hand, has committed additional cash for the initiative if necessary.

According to preliminary statistics produced by the rural development ministry, person-day work creation, which determines budgetary allocation for MGNREGS, has already exceeded 87% of the FY24 target.

Person days created under the system increased 9.3% year on year between April and October, surpassing the 2 billion milestone, according to the data. Approximately 214.5 million people chose to work under the plan till October of this financial year, a 5.8% increase over the previous year.

Members of 169 million households demanded work till October of the current financial year, a 9.5% increase over the previous year. The data is usually updated when new information comes in.