Budget 2017: MGNREGS gets a boost with highest-ever outlay of Rs 48,000 cr

Nilesh PintoMoneycontrolThe government has set aside Rs 48,000 crore for its rural employment guarantee scheme in 2017-18, 24 percent higher than last year and the highest-ever outlay for the project, Finance Minister Arun Jaitley announced in his Budget Speech on Wednesday.In all, allocation for rural, agriculture and allied industry is at Rs 1.87 lakh crore for 2017-18, up 24 percent year-on-year. Last year, the ministry had allotted Rs 87,765 crore for the development of the distressed rural sector, of which Rs 38,500 crore was set aside for the Mahatma Gandhi National Rural Employment Guarantee Scheme. Despite the large outlay for 2017-18, it is only Rs 1000 crore more than the actual spend of 2016-17.

The purpose of MGNREGS is to guarantee 100 days of employment a year to one member of every rural household, especially between two main crop seasons. Jaitley said a conscious effort was being made to double farmers' income through the scheme, adding that women's participation in the scheme has increased to 55 percent from less than 48 percent a year ago.

The Narendra Modi government has in the past been accused of giving the Mahatma Gandhi National Rural Employment Guarantee Scheme – a flagship scheme of the previous United Progressive Alliance government – the short shrift. However, the last couple of Budgets have witnessed the highest outlays for the initiative.

Against a target of 5 lakh farm ponds under MGNREGS, 10 lakh farm ponds would be completed by March 2017. Jaitley said. During 2017-18, another five lakh farm ponds will be taken up. To boost the rural economy through financial inclusion, the government had earlier broadened its focus from MGNREGS alone to various financial schemes like Jan Dhan Yojana and Micro Units Development Refinance Agency (Mudra) Bank, rural infrastructure development plans and health and educational grants. 

The government’s decision in November to devalue 86 percent of the currency in circulation had an impact on MGNREGS. The demand for work under the scheme suddenly peaked post demonetisation and the outlay for the social security scheme in the current year is set to surpass Rs 51,000 crore, the highest ever.

The rural development ministry even sought a few thousand crores in additional funds for MGNREGS, facing a liquidity crunch despite the highest-ever budgetary allocation this year.

Migrants - especially from Bihar,  Odisha and other states - have been returning to their native places as the cash crunch led to layoffs at small industrial units, and that has led to the jump in the demand for work under the scheme.  Assets created under NREGA included works related to natural resource management such as water conservation, land development and irrigation. Besides these, dams, irrigations channels, check dams, ponds, wells, Aanganwadi assets were also constructed under the scheme.

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