Despite huge outlay MGNREGA ends FY22 with Rs 20,000 cr negative balance

The negative balance is largely on account of pending material cost for the work done under the programme during the year and even earlier.

Despite the central government’s allocation of a hefty amount of Rs 98,000 crore in FY22 to MGNREGA, the financial year is expected to end with a net negative balance of about Rs 20,000 crore, latest provisional data sourced as on April 1, 2022, showed.

The negative balance is largely on account of pending material cost for the work done under the programme during the year and even earlier, while the proportion of pending wages in the total unpaid dues is considerably lower at just about Rs 1,840 crore, the data showed.

This could also mean that of the Rs 73,000 crore allocated for FY23, a significant chunk could go towards clearing pending dues from the last financial year leaving the remaining amount for undertaking new works during the year.

Civil society activists said that in the start of FY22, too, a sum of Rs 17,000 crore was pending from the previous year despite spending over Rs 1,11,170 crore in FY21.

In FY22, till April 1, 2022 around 72.4 million households have got work under the scheme which makes it the second consecutive year when more than 70 million families have worked in MGNREGA.

Prior to this, on an average 50-60 million households worked under MGNREGA, data showed.

Continuing demand for MGNREGA works in rural areas is also reflective of the slow pace of economic recovery and job creation in the hinterland post the pandemic, something which is also manifested in the slow growth of real rural wages, FMCG and two-wheeler sales.

In FY22, the data also showed that in total around Rs 1,27,667.63 crore was spent in the scheme including pending liabilities cleared from last year, while total availability of funds was around Rs 1,06,475 crore.

“This may also mean that the Budget for FY23 could last for around 5-6 months which has been the case with MGNREGA in the last several years therefore needing fresh infusion of funds midway into the financial year or else demand could be artificially suppressed or due clearance delayed to kill the demand,” Debmalya Nandy of the MGNREGA Sangharsh Morcha told Business Standard.

In FY22, the Centre had budgeted Rs 73,000 crore for MGNREGA but ended up spending almost Rs 98,000 crore due to continued robust work demand.

Similarly, in FY21, which is considered a landmark year for the scheme due to sudden spike in demand because of reverse migration of millions of laborers from cities to villages after the first lockdown, the Centre spent a record Rs 1,11,170 crore for MGNREGA. Though, it had budgeted for much less.

If the current pace of work demand is spilled over to the next financial year and over 7 crore households again look for work under the scheme.

Then conservative expenditure estimates show that based on FY22 average cost per person and number of days of work provided, the estimated expenditure on the scheme should come to somewhere around Rs 105,000 crore.

Meanwhile, the MGNREGA Sangharsh Morcha in a recent statement on the minimum wage hike for FY23 for the scheme said that as per their analysis in around 27 states and Union territories the wage rate is less than the corresponding minimum wage for agriculture, condemning the workers to another year of bonded labour.

The difference is greatest in Karnataka where the NREGA wage rate is only 70 per cent of the state minimum wage for agriculture.

“At a time when the country is going through the worst employment crisis in decades, this meagre hike in NREGA wages is nothing less than a much-touted ‘surgical strike’ on the poor. In the past few years, unemployment rates have touched historical highs and have consistently remained a concern,” the Morcha said in a statement issued a few days back.

  • MGNREGA maths for FY22 (as on April 1, 2022): provisional
  • Total Actual Expenditure (wage+material+admin): Rs 106,218.15 crore
  • Total Payment Dues (from previous year): Rs 21,449.47 crore
  • Grand Total All Expenditure: Rs 127,667.63 crore
  • Total Available Balance: Rs 107,680.46 crore
  • (-) Balance: Rs 19,987.16 crore

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