The fact that the entire budget allocation for the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) for this financial year was exhausted by the end of October is proof of the important role the scheme has played in the rural sector. The Narendra Modi government was not very enthusiastic about the scheme in the beginning but retained it as it was found to be useful and had popular support. The scheme mandates that the government should provide 100 days of employment to a rural household in a year. There has always been criticism that the allocation for the scheme was inadequate. This year's allocation of Rs 73,000 crore was more than last year’s but in terms of percentage, it was smaller. It was pointed out in the beginning of the year that there would be a need for more funds this year. Out of Rs 73,000 crore, Rs 17,000 crore was spent on paying the previous year’s dues.
Even in a normal year, MGNREGS has helped reduce rural distress in all parts of the country, and it has especially been a boon to rural women. The rural economy has suffered much in the last few years. The pandemic made matters much worse last year and this year. The huge influx of migrant labour into villages was a serious problem, and MGNREGS has helped such workers find work for some days. It was the increase in demand for employment, apart from the payment of dues, that led to the exhaustion of funds halfway through the year. The Central government has said that some states had artificially created the demand. But this has not been proved. In any case, providing more employment would only help those who needed it, and no amount of employment would be considered excessive when much employment and a lot many jobs have been destroyed. In such a situation, MRNREGS would not only relieve distress but would serve as a stimulus for the economy by increasing rural consumption and demand.
The government should not only allocate more funds for the scheme for the remaining months of the year but also ensure that it is implemented well. Surveys have shown that payments are usually delayed, though the rules stipulate that they should not be delayed by more than seven days. Still, delays keep recurring. Earlier this year, the Central government demanded through a circular that caste-wise statements of payments should be prepared and sent to it. This would not have served any useful purpose and has now been withdrawn. The unorganised sector takes more time than the formal sector to recover and would need more support. MGNREGS is one such support system that needs to be strengthened.