MGNREGS (Mahatma Gandhi National Rural Employment Guarantee Scheme) operates as a demand-driven program, allowing the government to allocate additional funds if the demand surpasses initial expectations.During pre-budget consultations, the rural development ministry proposed Rs 1.1 lakh crore for the fiscal year 2025, expecting a surge in demand for employment and an increase in wage rates.
In response to the growing needs, the government has already approved an additional Rs 14,524 crore for the current fiscal year, exceeding the initial budget of Rs 60,000 crore. This decision was part of the first batch of supplementary demands for grants, signaling a readiness to allocate more funds if necessary. Notably, in the fiscal year 2023, the government spent around Rs 90,000 crore on the MGNREGS.
Official data reveals that out of the augmented allocation for the current fiscal year, Rs 71,051 crore has been released so far. This increased funding is in response to the rise in demand for employment, attributed to an erratic monsoon disrupting migration patterns and a tentative industrial recovery, say experts pointing out that more people sought employment under the scheme till December.
Until December of the current fiscal year, the MGNREGS witnessed a notable increase in demand, with over 260 million individuals seeking work, marking a 3% rise from the previous year. This surge was particularly prominent between July and October. The demand emanated from nearly 207 million households, indicating a more than 6% increase from the same period in the previous year. Additionally, the scheme witnessed a noteworthy up to 10.4% hike in wage rates, contributing to increased expenditure.
However, the past two months have seen a moderation in the demand for MGNREGS work, coinciding with heightened economic activity in the country.