In her first public address after presenting the Union budget earlier this week, Finance Minister Nirmala Sitharaman hinted that the allocation for the government’s rural job guarantee scheme MNREGA will be increased “if demand arise”.
The Union budget on February 1 had cut down allocation to the scheme from Rs 98,000 crore this year to just Rs 73,000 crore for financial year 2022-23.
In fact, funds for the scheme which is virtually the bedrock of the rural economy, have seen a steady decline in recent years. It was Rs 1.11 lakh crore in the year of the pandemic, but revised estimates for this year show that it went down to Rs 98,000 crore, with the proposal for next year going further down to Rs 73,000 crore.
However, yesterday's pronouncements of Sitharaman sought to set the worries across quarters over its likely impact on rural consumption. Interacting with some of the top corporates and industrialists in the country, she said, “If demand rises, we will raise (funds allocated for MNREGA).”
However, the minister made it clear that the overall focus of the present government, in tune with its infra-oriented structural stimulus and budgets of last two years, was in formalising labour and skills, instead of supporting rural distress through essentially welfare schemes like MNREGA.
“Our effort is to ensure jobs, not doles,” the finance minister said, and added how formalisation of labour through initiatives like the E-Shram portal where informal workers can register with their skills, were the new strategy.
“Formalisation of jobs is happening,” she said. “Rural distress is being addressed in various ways, and not just through direct benefit transfer (DBT), but through measures like increased allotment to micro-nutrients, subsidies given in the past for fertiliser import (though fertiliser subsidies have been cut in this year’s budget proposals), schemes like Poshan Abhiyaan — as well as, of course, the E-Shram portal, which has already crossed 30 crore registrations.”
Sitharaman pointed out how funds for MNREGA were hiked from the allotted Rs 54,000 crore in financial year 2020-21 after the impact of the pandemic and national lockdown and breached Rs 1 lakh crore that year. “What I find is that these are demand-driven schemes,” Sitharaman said, “If demand rises, we are ready to add (funds) if need arises.”
