MGNREGA demand-driven, fund allocation may increase with growing demand: Union Finance Minister

The Finance Minister addressing a press meet in Bhubaneswar during her two-day Odisha visit said that the provision for MGNREGA has not been reduced in the budget for 2003-24.

Bhubaneswar: Union Finance Minister Nirmala Sitharaman on Friday clarified that there is no reduction in MGNREGA funds allocation in the Union Budget 2023 saying that the fund allocation may increase with growing demand. The Union Finance Minister was addressing a press meet in Bhubaneswar during her two-day Odisha visit. The Finance Minister said that the provision for MGNREGA has not been reduced in the budget for 2003-24. The Finance Minister said that MGNREGA is a “demand-driven programme”, adding the “provision will go up as and when the demand grows”. She said the government “wants to ensure that the funds are well spent”. The Finance Minister's statement comes amid an outrage over a massive cut in the outlay of the MGNREGA scheme for the financial year 2023-24 in the recently announced budget. In this year's Union Budget, the scheme outlay has been kept as Rs 60,000 crore, which is nearly Rs 30,000 crore less as compared to the last financial year.

In the financial year 2022-23, the MGNREGA outlay was Rs 89,400 crore. Significantly, the outlay under the rural employment guarantee scheme for the previous years has sharply declined. From Rs 1,11,170 crore in 2020-21, the outlay fell to Rs 98,468 crore in 2021-22 and Rs 89,400 crore in 2022-23. The consistent cut in the budget outlay has sparked fears of acute unemployment in the rural areas.

At the Bhubaneswar, the Union Finance Minister further stated that the GST compensation regime has been extended till 2026. She said the Centre is also repaying the loans availed during the Covid-19 pandemic to distribute among the states adding the states will not be affected as the GST revenue has also gone up post-pandemic. The Minister also said that the Centre has not reduced rice procurement this year. She said the MSP is “directly sent to the bank accounts of the farmers to eliminate intervention of middlemen”. The union Finance Minister is attending a post-budget discussion in Bhubaneswar on Friday.