The rural development ministry has requested ₹1.1 lakh crore for the rural employment guarantee scheme in the upcoming fiscal year. This amount is nearly double the ₹60,000 crore budgeted for the current financial year, according to a source familiar with the matter.
Expenditure under the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) could increase in FY25 due to high work demand, wage hikes, and inflation, according to the source.
A senior official from the finance ministry has reportedly stated that they are currently reviewing the demand for the FY25 budget estimate and will allocate an appropriate amount for the scheme.
In order to accommodate the upcoming elections in April-May, the government plans to present an interim budget for FY25 in February. The final budget for FY25 will then be presented by the new government in July of the following year. This interim budget will ensure that necessary expenditures can continue until the new government is sworn in.
According to officials, the revised estimate for the scheme in FY24 is expected to reach around ₹88,000 crore, which is close to the FY23 level of approximately ₹90,000 crore.
The expected rise in demand for work this fiscal year is attributed to a larger number of people actively seeking employment, surpassing the initial projection of a slowdown in demand.
According to a report by Economic Times on November 4, the finance ministry has released Rs 10,000 crore as urgent assistance for unexpected expenses under the MGNREGS. These funds will be part of the additional ₹28,000 crore that may be allocated for the scheme in the first batch of supplementary demands for grants for FY24 during the upcoming parliament session.
According to a former economic affairs secretary, ministries often exaggerate their requests during pre-budget meetings with the finance ministry in order to secure a larger budget allocation. While this may also be the case with the demand from the rural development ministry, the finance ministry may consider the overall perspective and finalize the allocations accordingly.
As a result of urgent fund transfers, the Centre has released ₹66,302 crore for meeting expenses under the scheme, surpassing the initial budgetary outlay.
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