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Funding for NREGS may be raised 15%

Funding for NREGS may be raised 15%
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First Published: Fri, Jan 22 2010. 11 42 PM IST

Updated: Fri, Jan 22 2010. 11 42 PM IST
New Delhi: The Mahatma Gandhi National Rural Employment Guarantee Scheme (NREGS) may get a 15% increase in allocation in Budget 2010, a senior official in the ministry of rural development?said, adding that it is likely to get around Rs45,000 crore instead of its current allocation of Rs39,100 crore.
To be sure, the increase is modest and overall government spending too will likely rise at the same rate, which is equal to the increase in nomi nal GDP (or gross domestic product not adjusted for inflation). It is also lower than the 30% at which allocation to NREGS increased in 2009-10, and far lower than the 150% at which the allocation increased in 2008-09.
NREGS (alternatively called NREGA after the Act on which the scheme is based), is the flagship programme of the Congress-led United Progressive Alliance government and is widely credited with helping the alliance win last year’s general election. The scheme promises 100 days of work every year to at least one adult member of every rural household at a minimum wage.
“The ministry had projected a requirement of Rs62,000 crore for NREGA, but we are likely to get something in the range of Rs45,000-50,000 crore, perhaps closer to Rs45,000 crore,” said the official who did not want to be identified.
The scheme currently covers 619 districts across India. The significant increases of past years can also be attributed to the increase in coverage, from 330 districts in 2007-08 to 615 districts in 2008-09 to 619 districts in 2009-10.
According to data from the rural development ministry, the scheme has used around 63%, or Rs24,538 crore, of the total budget allocation till the end of December and provided jobs to people in 41.5 million households. The average duration of employment per household was 46 days, against the stated goal of 100 days.
A second official at the ministry said the scheme would have no problems using up its budget for the year.
Flagship programme: Villagers from Dilwara district in Rajasthan build a channel and a wall for water harvesting under NREGS.Madhu Kapparath/Mint
“December-April is actually the peak period for NREGA, and in three months we are able to spend approximately 35% of the total allocation in that period,” said this person, who too did not want to be identified. “The utilization till December determines the allocation in the next budget to the extent that it indicates the demand under the scheme.”
A state-wise break-up of utilization shows that while most states have managed to utilize over 55-60% of allocated funds in 2009, some, such as Maharashtra, Jammu and Kashmir, and Arunachal Pradesh among others, have used less than 50%.
“This is a demand-based scheme and the expenditure is incurred accordingly,” said the first official. “This is why there cannot be a specific stipulation for spending under the scheme.”
The official was explaining why NREGS is exempt from a government stipulation that ministries spend two-thirds of the amounts allocated to their various schemes till December or have some of their allocations lapse.
According to data from the rural development ministry, it has spent 68.99%, or Rs43,237 crore, of the total allocation of Rs62,670 crore till mid-January (including NREGA); excluding NREGA, the ministry has spent around 79% of the total budget allocation—Rs18,666 crore of Rs23,570 crore.
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First Published: Fri, Jan 22 2010. 11 42 PM IST