NREGS outlay for FY24 may see steep hike with 58% used in Q1

economictimes.indiatimes.com:

rural job guarantee scheme, with 58% of the budgeted Rs 60,000 crore for 2023-24 used up in the first quarter itself, an official indicated. Almost steady work demand and up to 10.4% hike in wage rates under the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) have kept expenditure under the programme elevated, the official told ET on condition of anonymity. Person-day work generation in the crucial June quarter eased marginally to 1.11 billion from 1.14 billion a year before, but its impact was more than offset by the wage increase, he said.

For 2022-23, the Centre budgeted Rs 73,000 crore for the scheme but spent about Rs 90,000 crore. Experts said even if the work demand falls by about 10% in this financial year on the back of improved economic activities in the coming quarters, actual expenditure could touch the last fiscal's level, given the wage rate hike. This will mean a 50% jump over the budgeted outlay.

Finance minister Nirmala Sitharaman had earlier pledged more funds for the MGNREGS, a demand-driven programme, in this fiscal, if required. Total expenditure under the scheme — including states' contribution for materials used in the work — touched Rs 38,000 crore in April-June. The Centre bears the bulk of the financial burden under the scheme — total wage costs and 75% of expenses for materials.

States contribute 25% of the expenses for materials. «There are enough funds available to meet demand now. As such, demand drops during the rainy season when various MGNREGS works can't be taken up,» said the official.