The central government may have to earmark ₹2.64 lakh crore in the forthcoming Union Budget towards the Mahatma Gandhi National Rural Employment Guarantee (MNREGA) scheme if it intends to offer 100 days of work per household for the same number of beneficiaries who opted for the scheme during the current financial year. This will be more than double the amount set aside for MNREGA payments this year. In addition to the initial allocation of ₹73,000 crore, the government had in December 2021 set aside another ₹25,000 crore to clear MNREGA bills during 2021-22.

An analysis carried out by prominent social activists under the Peoples' Action for Employment Guarantee (PAEG) platform suggests that part of the budgeted amount will also go towards clearing the arrears. “On average, over the past five years, 20% of the Budget has gone into clearing the arrears of previous years. The unpaid dues this year are already at ₹12,494 crore. Assuming the expenditure trend so far in this FY continues, we estimate that over ₹21,000 crore would be pending at the end of FY 2021-22,”, PAEG said in a statement.

In the case of 2021-22, 26% of the ₹73,000 crore allocation in the Budget went towards clearing the previous year’s dues, the group points out. Incidentally, despite an allocation of ₹1.02 lakh crore for MGNREGA, the FY 2020-21 ended up with unpaid dues of over ₹17,000 crore.

The demand for MNREGA is expected to be high due to Covid-19 triggered economic distress among the most vulnerable sections of the society. PAEG points out that the person days generated had increased by 46% in financial year 2020-21, compared to the previous fiscal. Similarly, the person days generated during the current financial year till December 2021 have already exceeded FY 2019-20’s total person days by 10%.

The civil society group has taken ₹269 as the wage rate to arrive at the budget requirement of ₹2.64 lakh crore for FY 2022-23. Since National Rural Employment Guarantee Act states that wages must be at least as much as the minimum agricultural wage for each state, PAEG has taken the minimum agricultural wages announced by the various state governments and adjusted it by 5% for inflation in every successive financial year.

Economists Nikhil Dey and Jayati Ghosh are among the members of PAEG.

national rural employment guarantee act

Budget 2022: MGNREGA needs ₹2.64 lakh cr for 100 days/household