Civil society demands for increase in budgetary allocation under MGNREGA to clear pending wages

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published Published on Jan 31, 2020   modified Modified on Jan 31, 2020
-Press release by NREGA Sangharsh Morcha dated 31st January, 2020

Rural distress has risen to alarming levels. As per the Periodic Labour Force Survey (PLFS) of 2017-18, rural unemployment stands at 8 percent (statement 30 in Section 3.7, PLFS). In conjunction with skyrocketing food inflation levels, this is a serious concern. The situation is much worse for the landless depending on casual manual labour who constitute more than half the rural population. It is in this context that strengthening the National Rural Employment Guarantee Act (NREGA) can be a huge relief.

Funds Crunch

Notwithstanding the rural distress, implementing the NREGA is a legal obligation of the Central government. However, the demand-driven nature of the Act has been repeatedly stifled in letter and spirit. By severe rationing of funds, it has been made a supply driven programme. In February 2019, the NDA Government allocated Rs 60,000 cr for MGNREGA. Out of this Rs 9,330 cr were pending wage liabilities from previous years. Therefore, the FY 2019-20 with an allocation of around Rs 51,000 crore, which is now finished. As of 28th January 2020, 91% of wages due for payment, i.e., nearly Rs 2,800 crore, have not yet been paid by the Central Government. Half the states of the country (15 out of 31) have no finances to implement NREGA in February and March 2020. 8 out of the remaining 16 states will immediately slip into negative balance if they clear their current pending wages. Due to under-provisioning, states with positive net balance are holding on to the limited funds they have and not clearing the pending wages. For instance, Chhattisgarh indicates a net available balance of Rs 62 cr, but simultaneously also indicates pending wages of Rs 180 cr. If the Government of Chhattisgarh uses its available balance to clear all pending wages it will immediately run into a negative balance of nearly Rs 118 cr  with two more months to go in this FY. Lack of funds has brought the programme to a grinding halt.

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Press release by NREGA Sangharsh Morcha dated 31st January, 2020


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