The budget slashed funding under the flagship rural jobs scheme despite a prolonged period of declining wages which affected incomes and demand in rural India, especially for non-farm households. The Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) which entitles every rural family to 100 days of work in a year, saw its funding slashed from ₹73,000 crore in 2022-23 (budget estimate, or BE) to ₹60,000 crore in 2023-24 (BE), a reduction of 18%.
Further, the allocation under the jobs scheme is 33% lower than the revised estimates (RE) of ₹89,400 crore in 2023-24. Calculations by the Peoples’ Action for Employment Guarantee, a rights group, show that unpaid dues under the scheme are currently at over ₹16,000 crore, which means less than ₹50,000 crore will be available for new work generation in the next financial year.
“MGNREGS and the food subsidy scheme was instrumental in preventing the rural population from being decimated during the covid pandemic. The funding this year falls severely short of the wage work being demanded in rural areas. Our estimates show that ₹2.7 trillion is required to provide 100 days of work to each family which has worked under the scheme this year,” said Nikhil Dey, founder member of Mazdoor Kisan Shakti Sangathan, a group which was instrumental in India launching the scheme.
Among other major schemes of the rural development ministry, funding for the rural roads scheme (Pradhan Mantri Gram Sadak Yojana) was unchanged at ₹19,000 crore, but allocation for the rural housing scheme was raised from ₹48,422 crore in 2022-23 (RE) to ₹54,500 crore in 2023-24 (BE). “The National Rural Livelihood Mission (NRLM) has achieved remarkable success by mobilizing rural women… We will enable these groups to reach the next stage of economic empowerment through formation of large producer enterprises,” finance minister Nirmala Sitharaman said in her budget speech.
“Through supporting policies, they will be enabled to scale up their operations to serve large consumer markets as has been the case with several startups growing into ‘unicorns’,” the FM said.
The budget raised funding for NRLM from ₹13,336 crore in 2022-23 to ₹14,129 crore in 2023-24. But funds for the rural development department was slashed from ₹1.81 trillion in 2022-23 (RE) to ₹1.57 trillion in 2023-24 (BE), largely on account of the drop in funding for the rural jobs scheme. Funding for the National Drinking Water Mission was raised from ₹60,000 crore in 2022-23 (BE) to ₹70,000 crore in 2023-24 (BE). The scheme has set a target to provide safe drinking water tap connections to every rural family by 2024. Among social safety net schemes which are a lifeline in rural India, funding for old-age pensions were unchanged at about ₹9,600 crore. Funds for child nutrition schemes were raised marginally, from ₹20,263 crore in 2022-23 (BE) to ₹20,554 crore in 2023-24 (BE).
“If we take the combined expenditure on five major social sector schemes—child nutrition, mid-day meals, maternity benefits, rural jobs scheme and old age pensions—we seem to be back to square one after a period of two decades,” said Reetika Khera, professor of economics at IIT, Delhi. “The expenditure on these schemes fell from over 0.9% of GDP in 2009-10 to less than 0.4% in this budget.”
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