Delay in MGNREGS Funding and Impact on Rural Workers
- MGNREGS Background
- The Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) provides employment to rural workers for 100 days every year.
- However there has been an acute funding shortage in the financial year 2024-25, which is causing a delay in wage payment.
- Budget Shortfall and Delayed Payments
- Wages shortfall for the Rural Development Ministry stands at 4315 crore hence there is a delay in the disbursement of payment to the workers.
- Section 3(3)
- According to Section 3(3) of the MGNREG Act wages should be paid weekly or within two weeks of the completion of the work.
- Material Component Funding
- The Centre is also behind in granting 5715 crore for material components which the Centre bears 60 of the cost and states bear 40.
- Cascading Effects
- The delay in material component has its effect on the supply chain since vendors are hesitant to deliver raw materials that further stall the works of the current projects.
Governments Budgeting and Allocation Practices
- No Additional Allocation
- The Union government has not provided additional funds for MGNREGS in the 2024-25 Budget despite the deficit.
- Past Precedents
- In the past, additional funds were allocated as and when required For instance in 202021 when the pandemic and reverse migration happened the allocation was increased from 61,500 crore to 1,11,500 crore.
- Governments Stand
- On this basis, the government argues that its budgetary approach is right in so far as MGNREGS is a demand driven scheme and extra allocations are made only when needed.
Experts Objection Schemes
- Implementation
- There have been experts and activists on the view that the meager allocation artificially depresses demand for employment under the scheme since the amount does not meet the real demand.
- Findings of Parliamentary Standing Committee
- A report by the Parliamentary Standing Committee on Rural Development has expressed the opinion that reduced allocation affects wage payments in time and also release of materials badly, affecting the schemes execution.
