New Delhi: The Narendra Modi-led National Democratic Alliance government has increased the budget for the national rural employment guarantee scheme by 5,000 crore to 43,500 crore for 2016-17, minister of state for rural development Ram Kripal Yadav told Parliament on Monday.

The scheme “will not be shut down but strengthened. It is a special direction from the prime minister not to compromise on this scheme", the minister said in response to a query from Trinamool Congress leader Derek O’Brien in the Rajya Sabha.

In the budget in February, finance minister Arun Jaitley had earmarked 38,500 crore for the programme, which he had described as the largest allocation since its inception in 2006.

According to government officials, the fact that the scheme has received a fresh infusion of funds in a normal monsoon year proves the central government’s commitment to it.

“There were a lot of doubts raised about whether the programme will be continued or not. This should leave no doubts that the government is committed to the Mahatma Gandhi Rural Employment Guarantee Scheme," said one of the officials cited above.

Launched in 2006 by the Congress-led United Progressive Alliance government, the rural employment programme has been a key source of livelihood for millions of rural households. The programme guarantees up to 100 days of unskilled work in a year to every rural household and has been credited with helping raise rural incomes.

The past two years—2014-15 and 2015-16—have been bad monsoon years with an accompanying high rate of agrarian distress. As 10 states declared a drought last year, the Supreme Court pulled up the central government for not releasing funds for payment of wages totalling 8,000 crore.

The then rural development minister, Chaudhury Birender Singh, had said that the government had released additional funds to the states to help them meet the demand for jobs under the programme, bringing the total amount of money spent in 2015-16 to 46,000 crore.

The current year is on course to be an above-normal monsoon year, according to the India Meteorological Department.

Analysts welcomed the government’s move but expressed concern about the impact of inflation on the increase in budget.

“One has to look at increases in the budget vis-a-vis inflation. In real terms, the increase will be little if one indexes it against inflation," said former rural development secretary N.C. Saxena.

In his remarks, Yadav said that the government had been successful in curbing corruption and the siphoning off of funds by transferring wages paid under the scheme directly into Aadhaar-linked bank and post office accounts of beneficiaries.

“There used to be massive corruption. There was a perception that MGNREGA means loot. We have put a stop to the loot and lies through DBT (direct benefit transfer)," Yadav said, according to a PTI report.

There were a number of deficiencies and the government has taken several measures to improve transparency, he said.

“To curb corruption, we have taken the DBT route for payment of wages. We are also strictly monitoring the scheme," the minister said.

In response to another question, Yadav said MGNREGA had provided jobs to around 48.2 million families in 2015-16. The average employment created was for 49 days in the past six years.

The minister acknowledged there had been a delay in the payment of wages in the past few years. “This is mainly due to lack of funds. ...When our government took over, the entire budget money was released. There is no shortage of funds," he said.

“Earlier, the delay was four-five months. Now, it is being done within 15 days through the DBT route," he added.

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