Finance Ministry releases additional ₹3.4kcr for rural jobs guarantee scheme

New Delhi: The finance ministry released an additional ₹3,400 crore in urgent assistance for the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS), over and above the revised estimate of ₹86,000 crore for 2023-24, as work demand beat initial projections, a senior official told ET.

This pushed up the actual MGNREGS allocation for the financial year to ₹89,400 crore, against ₹90,806 crore a year before but almost 50% higher than the budget estimate of ₹60,000 crore.

As many as 3.05 billion person-days were generated under the MGNREGS - a demand-driven scheme - in 2023-24, against the revised target of 2.95 billion, showed the preliminary data compiled by the rural development ministry.


The data gets revised as and when updated information flows in.

"The extra funds were released to the rural development ministry a few days ago (in March). This will be enough to cater for the improved demand," said the official, who did not wish to be identified. This was the second time in 2023-24 that the government released urgent assistance for MGNREGS. The first such transfer was of ₹10,000 crore in the third quarter of the fiscal which was subsequently adjusted against the supplementary demands for grants of ₹26,000 crore. Work demand from individuals under the MGNREGS, which had declined marginally in the June quarter, grew in the range of 9.5-19.5% each month between July and October from a year before, driving up the expenditure under the programme. The demand was mainly driven by erratic seasonal rains that prevented the typical large-scale migration of rural workers into farming, forcing them to hold on to work under the MGNREGS, according to experts.

However, demand from individuals again contracted from November, mirroring improved economic activity. The economic growth rate of 8.4% in the third quarter beat analysts' projections and pushed up the full-year forecast to 7.6% from 7.3% predicted earlier, according to the second advance estimate of the National Statistics Office. Still, an up to 10% increase in the daily wage rate under the scheme across states in 2023-24 prevented any sharp moderation in the wage cost.

India witnessed "below normal" monsoon in 2023, the first in four years, as overall rainfall touched 94% of a benchmark long period average. This upset the government's initial projections of a sharp deceleration in work demand from the 2022-23 level on the back of improved economic activity.