New Delhi: The Union Government has decided to not release any additional funds for the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) for FY 25.
The reasoning behind this move is the government believes that the outlay of Rs. 86,000 crore should be enough for the year. Officials said that around Rs 7,500 crore unspent balance from this year’s allocation should cover the remaining period, reported Financial Express.
The Union Government said that some states which were relatively “well-off” were diverting funds and turning the rural employment guarantee scheme into an alternative income source instead of its original purpose to provide jobs to the needy.
“The highest amount the states had drawn was during Covid at about Rs 1.1 lakh crore when rural distress was real. Is Rs 86,000 crore low in normal times and rural demand is relatively doing well,” said an official.
So far in FY25, the Centre has released Rs. 82,684 crore which is 96% of the annual outlay of Rs. 86,000 crore.
However, the actual spending is around Rs. 94,500 crore, which includes utilisation of some past savings in the scheme as well.
Recently, Tamil Nadu Chief Minister MK Stalin had written a letter to Prime Minister Narendra Modi and had urged the Centre to release the funds without further delay.
In this year’s budget, the Narendra Modi government has allocated Rs 86,000 crore to the scheme – the same amount as what was spent on the scheme as per the Revised Estimate of 2024-2025. Rs 86,000 crore is also the exact amount that was promised in the Union Budget of 2024-25, presented in July, 2024, after the National Democratic Government came to power, indicating a stagnation in the budget for the scheme in recent years.
