Rural development department needs funds to support welfare schemes

The UPA-era MNREGS promises 100 days of work to the rural poor and accounts for the maximum spending on a centrally sponsored welfare programme.

A large pending wage bill for rural employment and stretched deadlines for building rural roads and houses are the principal issues that the Department of Rural Development faces as the government prepares budgetary allocations for FY24. Although pandemic woes receded and the economy started to grow in this financial year, income disparity widened and livelihood challenges continued for the rural poor.

The DoRD is tasked with managing some of the biggest welfare schemes for the rural poor. This central department is responsible for formulating and implementing policies on poverty alleviation, employment generation, rural infrastructure and rural housing.

The department’s budgetary allocation was increased almost 10 percent to Rs 1,31,466 crore in in FY22 and the amount was subsequently revised to Rs 1,53,504.99 crore. However, due to non-utilisation of the increased allocation – not even the budget estimate (BE) amount had been spent by March 2022 – the BE was increased only 3 percent to Rs 1,35,886.39 crore for FY23.

The department helms schemes including the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS), Pradhan Mantri Gram Sadak Yojana (PMGSY) and the Pradhan Mantri Awaas Yojana (PMAY). MNREGS is the biggest, getting more than 50 paise of every rupee allocated to the DoRD.

Rural employment

The UPA-era MNREGS promises 100 days of work to the rural poor and accounts for the maximum spending on a centrally sponsored welfare programme.

In FY21, the first pandemic year when widespread lockdowns forced migrant workers to return to villages and seek work under MNREGS, the budgetary allocation was revised to Rs 1,11,500 crore. However, the BE for FY22 was Rs 73,000 crore and subsequently, the Centre had to allocate more funds.

Since 2015-16, the annual budgetary allocation has never been sufficient and the revised estimate (RE) has always exceeded the BE.

In FY23, activists sought a record allocation of Rs 1.5 lakh crore in the budget for the scheme because demand for work remained high and not everyone who got work was paid on time.

The arrears of the previous year are settled after the amount allocated in the budget arrives. Also, while the act guarantees 100 days of work to every willing rural household, employment has been provided for less than 50 days a year in the past five years.

Finance minister Nirmala Sitharaman told Parliament last month that demand for work under MNREGS declined in the current financial year.

The number of households that demanded work under the scheme was about 21.2 million in December 2022, lower than 23.2 million in April 2022, according to the NREGA dashboard maintained by the DoRD.

However, only 56 million households were provided employment from April 1 to January 9 in FY23. The average period for which employment was provided per household in FY23 was 40.68 days, the lowest in five years.

At 1.36 million, the number of households provided 100 days of work in FY23 was the lowest in a decade.

Activists working with MNREGS beneficiaries across states say the budget allocation should be at least Rs 1.5 lakh crore in FY24 if the government wants to ensure even 50 days of work to 103 million job card holding households. Besides, with pending wage and material payments topping Rs 10,000 crore, a far higher BE for MNREGS is the need of the hour, they pointed out.

Rural Housing

The Pradhan Mantri Awaas Yojana (Gramin) deals with Central assistance in providing housing for the rural poor. Its urban chapter aims to fulfil the housing needs of the poor living in the cities and towns.

Implementation of PMAY (G) started in 2016, with a target of constructing 30 million new rural housing units by 2022. As per the department’s latest data, about 18.23 million housing units were targeted for completion in FY23.

The PMAY (G) scheme accounts for the second-highest allocation under the DoRD. A parliamentary standing committee, which reviewed the action taken on the demand for grants made by the DoRD, has reemphasised the difference in Central assistance for housing units between rural and urban areas.
For building houses in villages, the assistance provided was Rs 1.2 lakh (Rs 1.3 lakh in hilly areas), whereas for houses in urban areas, the amount was almost double at Rs 2.5 lakh. The panel urged for parity between the two amounts.

The committee also pulled up the DoRD for missing the target of 6.4 million housing units for FY21, when only about a third of them were constructed.

“The committee apprehends that with this pace of house construction the target for ‘Housing for All by 2022,’ which is not very far, is hardly achievable,” it said in a report.

The target for building 29.5 million houses has been delayed by two years to 2024 now. The budgetary allocation for this scheme was 2 percent lower at Rs 20,000 crore in FY23, according to PRS Legislative Research.

Rural Roads

The Pradhan Mantri Gram Sadak Yojana seeks to provide all-weather roads to link habitations in rural India. PMGSY-I was started to connect places with a population of 500+ in the plains and 250+ in the North-East and Himalayan states. In selected left wing extremism blocks, habitations of 100+ people were also to be provided connectivity.

Of 646,000 km of roads and 7,523 bridges that were to be built under this programme, 20,950 km of roads and 1,974 bridges remained as of March 2022. Since 2016-17, the expenditure on this programme has been lower than the budgetary allocation each year, with the lowest spending in FY21, when it was 70 percent of the allocation.

Other issues

A shortage of technical staff at the panchayat level hampers implementation of all of DoRD’s prominent schemes. The rural employment scheme additionally suffers from delayed wage payments and widespread wage disparity.

PMGSY has had trouble with contractors winning bids at lower amounts and building substandard roads.

Under PMAY (G), apart from lower allocations compared with those for urban houses, there are also difficulties in finding land on which to build houses.