Global Economy

Funding demand for rural employment guarantee scheme almost doubles

New Delhi: The rural development ministry has sought ₹1.1 lakh crore for the rural employment guarantee scheme for the next fiscal, almost double the ₹60,000 crore budgeted for the current financial year, a person aware of the details told ET.

Relatively strong work demand, wage hikes and inflation could push up expenditure under the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) in FY25, he added.

“The demand for FY25 BE (budget estimate) is being examined and an appropriate amount will be allocated for the scheme,” said a senior finance ministry official.

The government will present an interim budget for FY25 in February as elections are due April-May. The final budget for FY25 is likely to be presented in July next year by the new government. The interim budget allows expenditure to continue until a new government is sworn in.

Officials had earlier told ET that the FY24 revised estimate for the scheme could touch ₹88,000 crore, closer to the FY23 level of about ₹90,000 crore.


The likely increase is due to more people seeking work this fiscal, beating the initial projection of a moderation in demand.

A former economic affairs secretary, however, said ministries usually inflate their demands when they attend the pre-budget meetings with the finance ministry to secure a high budgetary outlay. “This might be the case with this demand (from the rural development ministry) as well. But the finance ministry always has to look at the big picture and firm up allocations,” he said.

On November 4, ET reported that the finance ministry had recently released Rs 10,000 crore in urgent assistance to meet unexpected expenditure under the MGNREGS.

The funds will form a part of the additional ₹28,000 crore that could be allocated for the scheme in the first batch of supplementary demands for grants for FY24 in the next parliament session.

The Centre has so far released ₹66,302 crore to meet expenditure under the scheme, higher than the initial budgetary outlay, thanks to the urgent fund transfer.


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