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Allocation of Funds to MGNREGS

Mahatma Gandhi National Rural Employment Guarantee Scheme:

The Finance Ministry has allocated additional funds of ₹10,000 crore as an interim measure for the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) after it ran out of funds allocated in the budget, according to the Ministry of Rural Development (MoRD).

  • More funds may be forthcoming based on the “assessment of demand,” added the Ministry.
  • The extra money was allocated on November 5. However, the scheme’s financial statement on November 25 still reflects a negative net balance of ₹9,888 crore.
  • Despite the additional allocations, the funds available for the scheme stand at ₹76,340 crore, well below the ₹86,229 crore which have been incurred as expenditure, including payments due for wages and materials.
  • Meanwhile, more than ₹1,170 crore worth of wage payments for MGNREGS workers are still pending.
  • Lack of funds results in suppression of demand for work and delayed payment of wages to workers.
  • These are violations of the Act; they also constrain economic recovery, said an open letter from more than 70 economists to the Prime Minister.