Union Budget 2018: Highest funding allocated to MGNREGA in 2017, yet, 56% wages were delayed

By Ashwini Kulkarni

The 2017-18 budget saw the highest ever allocation to Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) — the world’s largest make-work programme — at Rs 48,000 crore, but 56 percent wages were delayed and 15 percent wage seekers did not find work in 2016-17, an IndiaSpend analysis of government data shows.

The allocation to be announced by Finance Minister Arun Jaitley on 1 February, 2018, when he presents his government’s last full-year budget ahead of the general elections in 2019 will be closely watched, even as his government has decided to “pump an additional Rs 7,000 crore into the rural job scheme” for the current financial year, as The Telegraph reported on 5 January, 2018.

Eight states have declared a drought in the past year, and 6,867 farmers were reported to have committed suicides due to farm distress. India’s agricultural growth has been declining, and has now dipped to 2.1 percent, government data show.

As much as 64 percent of India’s agriculture is rainfed and 85 percent of Indian farmers are categorised as small or marginal–that is, they own less than 5 acres of land.

With demonetisation adding to the troubles, as IndiaSpend reported here and here, MGNREGA becomes crucial to tackle rising rural distress.

Pending liabilities from previous years rising, more than 50 percent wages pending

Between 2012-13 and 2016-17, pending payments, as a percentage of MGNREGA expenditure, rose from 39 percent to 56 percent, and the expenditures in each of the five years have exceeded allocations.

But the funding has been slow and erratic – as The Wire reported in October 2017, quoting the NREGA Sangharsh Morcha, a workers’ group–leading to a backlog of pending payments.

Meanwhile, delayed wages accounted for 56 percent of all MGNREGA wage payments in 2016-17, up from 39 percent in 2012-13, government data show. The year 2014-15 had the highest proportion of delayed wage payments at 73 percent of all wage payments.


As of 25 January, 2018, eight states had a net negative balance of Rs 1,555 crore in terms of MGNREGA funds–that is, they have spent.more on the MGNREGA than they received from the Centre.

Wage payments under the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) have been frozen in 19 states as of October 31, 2017, as IndiaSpend reported on November 6, 2017, based on official data.

The wage delay is despite the implementation of the electronic Fund Management System (e-FMS) in 97 percent of gram panchayats (village councils). Under e-FMS, wages are electronically transferred to the worker’s bank/ post office accounts “to reduce unnecessary parking of funds in the States”, the rural development ministry told the Lok Sabha (lower house of Parliament) on January 4, 2018.

Getting money from the bank is also long-drawn: In rural India, there are 7.8 bank branches per 100,000 population, less than half the 18.7 branches per 100,000 population in urban India, according to this December 2015 report from the Reserve Bank of India.

In 2016-17, of 89 million wage seekers, only 76 million found work

MGNREGA is a demand-driven programme–that is, wage seekers can register to obtain work under the programme.

Only 85 percent of people who registered as wage seekers found work in 2016-17, according to data from the MGNREGA dashboard.

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Updated Date: Jan 29, 2018 12:00:50 IST