Support for major rural schemes down

The budget slashed funding under the flagship rural jobs scheme despite a prolonged period of wage cuts that has affected incomes and demand in rural India, particularly for non-farm households. The funding of the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) which entitles every family in the countryside to 100 working days per year has been reduced. 73,000 crore in 2022-23 (budget estimate, or BE) to 60,000 crore in 2023-24 (BE), a decline of 18%.

In addition, the allocation under the jobs scheme is 33% lower than the revised estimates (RE). 89,400 crore in 2023-24. Calculations by Peoples’ Action for Employment Guarantee, a rights group, show that unpaid dues under the scheme are currently approaching. 16,000 crore, which means less than 50,000 crore will be made available for new job generation in the next financial year.

“MGNREGS and the food subsidy scheme were instrumental in preventing the rural population from declining during the covid pandemic. The funding this year is very short on the wage work that is being demanded in rural areas. Our estimates reflect that 2.7 trillion is needed to provide 100 days of work to every family that worked under the scheme this year,” said Nikhil Dey, founder of Mazdoor Kisan Shakti Sangathan, a group that was instrumental in launching the scheme in India.

Among other major schemes of the Ministry of Rural Development, the funding of the rural roads scheme (Pradhan Mantri Gram Sadak Yojana) remained 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 Livelihoods Mission (NRLM) has achieved great success by mobilizing rural women… We will enable these groups to reach the next stage of economic empowerment by establishing large producer enterprises,” said Finance Minister Nirmala Sitharaman in her budget speech.

“Through support policies, they will be enabled to increase their operations to serve large consumer markets as has happened with some start-ups growing into ‘unicorns’,” said the FM.

The budget raised funding for NRLM from 13,336 crore in 2022-23 14,129 crore in 2023-24. But funds for the rural development department were reduced 1.81 trillion in 2022-23 (RE) to 1.57 trillion in 2023-24 (BE), largely due to the reduction in rural job scheme funding. 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 of providing safe drinking water connections to all rural households by 2024. Among the social safety net schemes that have been a lifeline for rural India, funding for old-age pensions has remained unchanged for about 9,600 crore. Funds for child nutrition schemes have been raised slightly, oh 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—it seems we are back at square one after a two-decade gap,” said Reetika Khera, professor of economics at IIT, Delhi, “The expenditure on these schemes fell from more than 0.9% of GDP in 2009-10 to less than 0.4% in this budget.”

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Updated: 02 February 2023, 12:41 AM IST

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