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Release funds to MGNREGA, urge economists in open letter to PM

Our Bureau New Delhi | Updated on November 24, 2021

The academics expressed dismay at the fact that the fund allocation for the scheme was cut by nearly 30 per cent

The letter underlined that the MGNREGA has assumed more significance during the period of the pandemic

Country’s top economists, researchers and activists have written an open letter to Prime Minister Narendra Modi expressing their concern about the funds crunch in MGNREGA and demanding immediate release of additional funds to ensure that the programme functions as the law requires.

The letter, signed by several academics and intellectuals including Jean Dreze, Jayati Ghosh, CP Chandrasekhar, Amit Bhaduri, Prabhat Patnaik, C Rammanohar Reddy, R Nagaraj, Pronab Sen and others underlined that the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) has assumed more significance during the period of the pandemic when employment levels and incomes across the country remain significantly lower than before.

‘Violations of the Act’

“It is unfortunate that despite seeing evidence of the critical security provided by MGNREGA during the first year of the pandemic with 41 per cent more rural households seeking work in 2020 compared to the previous year, the fund allocation for the programme was cut by nearly 30 per cent. Lack of funds results in suppression of demand for work and delayed payment of wages to workers. These are violations of the Act; they also constrain economic recovery,” said the letter.

Also read: Demand for additional funds for MGNREGS gets louder

“Of the central budgetary allocation of ₹73,000 crore for the programme for FY20-21, ₹17,451 crore (nearly a quarter of the amount) would simply meet the pending liabilities of previous years. With more than four months remaining in this financial year, the estimated expenditure has already exceeded the budget allocation. As per official data, the People’s Action for Employment Guarantee (PAEG) estimates that as of November 15 the programme was in deficit of ₹10,000 crore. Over ₹1,121 crore is due to the MGNREGA workers as wage payments. 24 States and Union Territories have negative balances, having spent more than they received from the Centre. This implies that the State governments are in no position to implement the Act,” it added.

“Without further increase in funds, the programme will also be unable to meet its promise of providing 100 days of work to every household that demands it: over 51 per cent of households employed under MGNREGA this year got work for 30 days or less, and less than 10 per cent were employed for more than 80 days,” said the letter.

Published on November 24, 2021

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