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LATEST NEWS UPDATES | Questions on MGNREGA budget estimation -Laavanya Tamang and Anuj Goyal

Questions on MGNREGA budget estimation -Laavanya Tamang and Anuj Goyal

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published Published on Feb 22, 2022   modified Modified on Feb 22, 2022

-The Hindu

How the Centre’s approach has eroded the very premise of MGNREGA  

The disappointing allocation for the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) in the FY 2022-23 budget has created a buzz. Organisations such as the All India Kisan Sabha and NREGA Sangharsh Morcha (NSM) have raised concerns about the inadequacy of the amount. Grassroots activists and academics have been demanding higher budgetary allocations for MGNREGA; yet, the actual allocations have been considerably lower and severely inadequate to meet needs. The initial allocations in the past two FYs have been just about half of what was recommended by groups like the People’s Action for Employment Guarantee (PAEG) and NSM.

Consequently, the consistent shortage of funds has caused a situation endemic to MGNREGA — that of deficits for State governments, long delays in wage payments, decline in the work provided in the last two quarters of the FYs, and significant pending dues at the end of the FYs. In FY 2021-22, a tracker released by PAEG showed that the initial amount allocated was nearly exhausted by September, and many States were running a negative balance. For FY 2022-23, PAEG had recommended a minimal allocation of 2.64 lakh crore, and NSM had recommended 3.64 lakh crore, but the government has allocated only 73,000 crore. In its recent statement, NSM has argued that this amount provides for only 16 days of employment to all the active job card-holding households.

Why is the government’s allocation so much lower than what State governments ask for and civil society actors recommend? This question merits scrutiny of the way the government estimates persondays. A closer look at the Centre’s MGNREGA budget estimation in FY 2021-22 sheds some light on this.

Projected persondays

Among other things, the budget calculations depend on two important variables: the projected persondays for the coming year, and the wage rate. Projected persondays are the total days of work anticipated for the year. The District Programme Coordinator is responsible for calculating this and submitting it to the State, which in turn collates the entire State’s projected demand and submits it to the Centre for approval. The MGNREGA MIS Report R2.2.2 has the monthly projections approved by the Centre, along with the actual persondays generated. A closer look at these figures for the last two years reveals some discrepancies. In FYs 2019-20 and 2020-21, the persondays generated was about 18.4% higher in Q4 when compared to Q3. However, the projected persondays for Q4 in FY 2021-22 appeared to be strangely and significantly lower than that in Q3. FY 2020-21 was an unusual year, with the pandemic and the subsequent lockdown measures leading to significantly increased MGNREGA work demand. Work demand continued to be high in FY 2021-22 as well, implying that the rural population was still relying on MGNREGA for their livelihood. For the first three quarters, persondays generated this year were only 7% lower than the persondays generated in the same time period last year. And yet, as on February 3, 2022, the projection for the last quarter of this year was only about 40% of that for the same period in the previous year. There seems to be no clarity on how this projection was arrived at, given previous trends, and given that with the harvest concluding MGNREGA work has traditionally picked up in Q4. However, what it does suggest is that the government had not revised its projections for the final quarter of this FY even while it announced supplementary grants worth 25,000 crore for MGNREGA in December 2021.

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The Hindu, 22 February, 2022, https://www.thehindu.com/opinion/op-ed/questions-on-mgnrega-budget-estimation/article65071410.ece?homepage=true


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