Govt Could Be Increasing Funds For MGNREGS As Demand Climbs For Rural Work

The ministry is reportedly looking to hike the funds beyond the revised estimate of Rs 86,000 crore to accommodate for higher-than-expected demand for work

Expenditure under the MGNREGS stands at 106 per cent of the available funds, while Rs 82,963 crore have also been disbursed from the approved outlay of Rs 86,000 crore. 

Source : ABPLIVE AI

The finance ministry is considering a proposal to increase the funds for the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) in the current fiscal year, media reports said. The ministry is reportedly looking to hike the funds beyond the revised estimate of Rs 86,000 crore to accommodate for higher-than-expected demand for work, The Economic Times reported.

Under the second batch of supplementary demands for grants for 2024-25 fiscal year (FY25), the rural development ministry has asked for extra funds. As of now, expenditure under the MGNREGS stands at 106 per cent of the available funds, while Rs 82,963 crore have also been disbursed from the approved outlay of Rs 86,000 crore. 

The report noted that exact amount of additional allocation remains to be determined. A major chunk of the second batch of supplementary demands for grants could be catered via savings or increased receipts from several ministries. This will help ensure that total government spending remains in control. The supplementary batch is expected to be presented in the Parliament in March.

The government has a fiscal deficit target of 4.8 per cent of GDP for the current fiscal year. In FY25 so far, the scheme has managed to generate 2.64 billion person-days of employment, exceeding the full year target of 2.44 billion, preliminary data from the rural development ministry showed.

Meanwhile, 3.1 billion person-days were recorded in 2023-24. The reduced target was based on anticipation of lowering demand due to an improvement in economic conditions and the availability of alternative employment opportunities.

Work demand consistently reduced between November 2023 and October 2024. However, the demand started rising again.

The data showed that demand until February 2024-25 remained lower in comparison to the year-ago period but it surpassed initial government estimates. This resulted in the need for additional funding.