Union Budget 2020: Centre slashes MGNREGS fund by ₹9,000 crore

The government has slashed funds for India’s flagship rural job guarantee programme, the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS), by ₹9,500 crore when rural economy has been feeling the heat over stagnant wages and high food inflation.

The budget documents show that the government has allocated ₹61,600 crore in the FY20-21 general budget as against the expense of ₹71,001 crore in the revised estimate (RE) of FY 19-20. The steep cut indicates the government’s fiscal situation even when many experts had suggested that the Centre should spend more money in the job programme to boost rual economy and give more money in the hands of rural poor.

In the last year’s budget, the government had allotted ₹60,000 crore for the MGNREGS, the highest allocation for the scheme.

While the government has shied away from committing higher allocations for MGNREGS at the beginning of the new financial year, it has, however, substantially increased the allocations for rural roads by nearly ₹5,000 crore. The Pradhan Mantri Gram Sadak Yojana has been given ₹19,500 crore, up from the revised estimate of ₹14,070 crore in the FY19-20.

The higher allocations come in the backdrop of the government’s emphasis into creating a wider network of rural roads that can not only ease the movement of passengers from villages to district headquarters or further but also help farmers to bring his produce to the market with the help of vehicles. The government had also started a rural transportation scheme to leverage the road network better and to maximise its utility. Experts added that a section of the road funds would be used for repairing and building new roads. But they also pointed out that building a road network in Left-wing extremist affected areas have remained a major challenge.

The government has also increased allocations for the rural housing scheme, one of the most popular welfare schemes of this current regime. As against the RE of ₹18,475 crores, the finance ministry has allotted ₹19,500 crore, indicating additional resources for achieving higher targets for the scheme. The rural development ministry has completed over 1.5 crore rural houses in the last five years. Prime Minister Narendra Modi has set the target of building a total of 1.95 crore houses in the second phase of the scheme including 60 lakh houses during the current financial year.

Similarly, it has also increased allocations under the national livelihood mission to ₹9,210 crore from ₹9,024 crore.

The measures come when the food inflation has spiraled to 14 per cent in December last year while real wages have slipped for past eight months in rural India. many experts wanted the government to pump in more money in the MGNREGS which would enable higher income and more spending capabilities for the rural poor. The scheme now has 12.5 crore active workers in the ongoing financial year.