Modi Govt’s Eternal Dilemma: How To Own NREGA Without Crediting The Congress

MGNREGA is not as well funded as it should be and the budget allocation lacks the momentum of the pro-poor rhetoric of BJP.

Village women work at a dry pond under the Mahatma Gandhi National Rural Employment Guarantee Act (MNREGA)

Having called the Mahatma Gandhi National Rural Employment Guarantee scheme (MGNREGA) a symbol of failure of the Congress party in the past, the BJP led Narendra Modi government is still sending confusing signals on how it looks at the scheme. Finance Minister Arun Jaitley’s Budget speech on February 1 tried to own the scheme by saying that the budget allocation of Rs 48,000 crore for FY18 is the highest ever and a 25% increase from the previous fiscal. Going by his words, last year’s allocation for MGNREGA was Rs 38,500 crore.

However, he did not mention the additional funds allocated to the scheme were only released after being admonished by the Supreme Court for delaying wages of workers. As People‘s Action for Employment Guarantee pointed out, the total allocation thus amounts to Rs 47,500 crore which means in nominal terms the current increase in budget is only 1%. And, after adjustments for inflation, this increase clearly does not rise up to the pro-poor stance Jaitley has claimed his government has taken.

Further analysis of the scheme’s progress shall prove that the scheme is still underfunded and shall fall short in providing social security to the poor.


MGNREGA since its inception in 2005 has employed a total of 25.33 crore workers out of which only 10.9 crore (43%) are active workers. Active workers are those who were employed for a minimum of one day in the previous three financial years or in the current financial year.

Till date in fiscal 2016-17, total employment provided was 178 crore person days and an average of 38 days per household which covered 4.6 crore households and 6.7 crore individuals (62% of active workers). On the other hand, in the previous fiscal, the total person days generated was 235 crore and an average 48 days of employment per households. This covered 4.8 crore households and 7.2 crore individuals.

Out of the 4.6 crore households employed in 2016-17, only 3% ( 13.5 lakh) of the households completed 100 days of employment while it was 48.5 lakh (10%) in the previous fiscal.

With two months left for the current fiscal to end, it seems unlikely that the previous year’s numbers of providing jobs will be matched. If the aim was to provide higher levels of job and income security to the poor households, the funding allocated would have been more. This is bad news for the poor and especially the rural poor who in large numbers returned to their villages due to lower job prospects in cities post demonetisation.

Work Completion

The national work completion rate is 21.6% in the current fiscal against 47% in the previous and 85.8% in 2014 -15. Jaitley claimed that the target of 5 lakh ponds and 10 lakh compost pits shall be completed by March 2017 and on top of that he expects to complete 10 lakh ponds instead of 5 lakh. Only by March 2017 we shall be able to say if this target can be met in the current pace of 21.6% completion rate.

Available Funds And Liabilities

As per the fiscal statement of 2016-17, the total funds available for MGNREGA in the fiscal is Rs 50,162 crore. As of February 2017, Rs 46,890 crore, i.e. around 94%, has been utilized while the total expenditure, inclusive of the payments due, amounts to Rs 53,730 crore. Two more peak months to go in the current fiscal, the scheme already has mounted a liability of Rs 3,568 crore which shall be carried forward to the next fiscal. Out of the liability, Rs. 3,721 crore is wages due to workers.

In short, the scheme is not as well funded as it should be and the budget allocation lacks the momentum of the pro-poor rhetoric of BJP. To utilise the scheme to its full potential will mean that the BJP will have to admit that the Congress led UPA’s rural employment scheme is indeed a good one if properly implemented.

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