New Delhi: The budget may allocate Rs40,000 crore to the National Rural Employment Guarantee Scheme (NREGS), an increase of 33% over its preceding allocation, an official of the rural development ministry said.
This amount has also been recommended by the Planning Commission, India’s apex planning body.
The development could not be confirmed at the finance ministry as budgetary requests for funds are confidential. The budget for 2009-10 is scheduled to be presented in Parliament on 6 July.
NREGS is the United Progressive Alliance government’s flagship welfare programme, which guarantees at least 100 days of employment in a year to one member of a poor rural household at minimum wages. Most jobs created under NREGS are in the area of water conservation and land development.
The rural development ministry also proposes that NREGS and some other Central programmes, such as its rural roads programme called the Pradhan Mantri Gram Sadak Yojana (PMGSY), and irrigation projects, be converged, the official added. He spoke on condition of anonymity.
The scheme, launched in 2006 and extended in 2008 to cover all the 596 districts in the country, is believed to have earned good dividends for the Congress party in the recently held general election.
The official said the ministry was also looking at creating jobs in other areas not yet touched by NREGS, such as village schools. “This will ensure there is productive infrastructure creation in the medium to long run,” he said.
However, he pointed out that Rs40,000 crore is not enough for a programme as big as NREGS. “(The) ministry is expecting more allocation in supplementary budgets.”
Supplementary budgets are spread through the year and additional allocations for Union government-sponsored schemes are made through them.
Mridul Saggar, chief economist at Kotak Securities Ltd said creation of rural assets should be seen in their totality and comprehensives programmes needed to be drawn for that. “To make NREGS meaningful, converging NREGS with programmes such as PMGSY is a good idea as the latter links rural areas as also urban and rural areas,” Sagar said. “In fact, I would suggest NREGS should also be linked to maintenance of assets created. In the process, wage rates should also rise to take care of the inflation.”
“However, efforts should be made to curb leakages,” he added.
A Planning Commission official, who didn’t want to be identified, said the planning agency was of the opinion that jobs created under NREGS should be linked to asset creation and enhanced productivity.
NREGS has drawn criticism for not creating substantial assets and leakages of money earmarked for the rural poor, besides lack of coordination between government agencies implementing it.