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LATEST NEWS UPDATES | Centre mulls steps to cut job scheme cost -Basant Kumar Mohanty

Centre mulls steps to cut job scheme cost -Basant Kumar Mohanty

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published Published on Feb 5, 2015   modified Modified on Feb 5, 2015
-The Telegraph

New Delhi: The NDA government is looking at two possible steps to cut down expenditure on the job guarantee scheme that seeks to provide 100 days of employment a year to every rural household.

The rural development ministry is exploring the idea of limiting the scheme to six months instead of a year in about 4,000 blocks that are not covered under intensive implementation.

Workers under the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) in these 4,000 blocks would get work when agricultural activities are lean. In the 2,500 backward blocks chosen for intensive implementation, the scheme would be available through the year.

The other option the ministry is mulling is a change in the funding pattern by making states pay 25 per cent towards the wage component. At present, the Centre bears 100 per cent of this component. Material expenditure is shared in a 75:25 ratio between the Centre and states.

The scheme allows panchayats to take up labour-intensive projects for which expenditure on material cannot exceed 40 per cent of the total project cost.

The Centre spends about Rs 40,000 crore on the scheme in a year while states spend about Rs 3,000 crore towards the material component. If the funding pattern of the wage component is changed, the burden on the Centre will lessen, sources said.

Any change to the scheme would require amendment of the MGNREGA.

"This government wants to dilute the scheme anyway. So they are exploring options one after another. We will oppose it," said Nikhil Dey, a social activist.

Last August, rural development secretary L.C. Goyal had said the job scheme did not require all-India coverage and advocated the need for better targeting.

In an internal note, he had said that in states like Punjab, Haryana, Maharashtra, Gujarat, Tamil Nadu and Kerala, the act did not seem necessary barring in a few backward areas.

He had also suggested amending the MGNREGA to limit its implementation to 200 backward districts.

After protests by economists, political parties and activists, the government had put that proposal on hold.

The ministry has now decided to focus intensive implementation of the scheme in 2,500 backward blocks. Each block would have a team to plan focused implementation for creation of more durable assets.

Recently, the finance ministry cut Rs 3,000 crore from the Rs 34,000 crore allocated for the job scheme in the 2014-15 budget.


The Telegraph, 4 February, 2015, http://www.telegraphindia.com/1150205/jsp/nation/story_1591.jsp#.VNLYVS7xxpA


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