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MGNREGS discussions must go beyond budget allocations -Dipti Jain

-Livemint.com

MGNREGS has to cover significant ground to evolve as an effective demand driven asset creating public work programme

Union finance minister Arun Jaitley’s claim that he was making the highest ever allocation to Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) in this year’s budge made headlines.

Here are five questions which can help understand why MGNREGS related discussion needs to go beyond talks of budgetary allocation.

* Is 2017-18 record allocation for the MGNREGS?

2017 budget has set aside Rs48,000 crore for the MGNREGS for 2017-18. This is marginally more than Revised Estimate value of Rs 47,499 crore for 2016-17. Yamini Aiyar, director of the Accountability Initiative, wrote in Mint that an amount of Rs 53,594 crore has been already been spent on the scheme in FY2016-17 (till 1 February, 2017).

Deflating MGNREGS allocations with Consumer Price Index Rural (CPI-R) with 2012 as the base year shows that real allocation for MGNREGS in 2017-18 might come down from 2016-17. We have taken annual CPI-R values from 2011-12 onwards to make these calculations. For 2016-17 these values are for quarter ended December and 2017-18 budget’s estimate of average 4% inflation has been used to extrapolate average CPI-R for 2017-18. These adjustments mean that real allocation figures for 2016-17 and 2017-18 would be slight overestimates.

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