Good monsoon is likely to create more jobs in the agriculture sector, which in turn could save the exchequer around Rs 10,000 crore
Good monsoon over many parts of the country so far this year and its favourable forecast for the remaining weeks seem to be making a positive spin-off on government finances.
Officials in the rural development ministry are hopeful that they might not need more funds from the central government, if adequate number of jobs is created in the agriculture sector because of the monsoon.
This could save the exchequer around Rs 10,000 crore (Rs 100 billion) in 2016-17.
The ministry had anticipated Rs 15,000 crore (Rs 150 billion) as its additional requirement for the year over and above the Budget allocation and it recently got Rs 5,000 crore (Rs 50 billion) through the second supplementary from the finance ministry.
This takes the total allocation for the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) from the finance ministry in 2016-17 to Rs 43,500 crore (Rs 435 billion) (Rs 38,500 crore through Budget plus Rs 5,000 crore through second supplementary).
Out of the total allocation, officials estimate Rs 28,500 crore (Rs 285 billion) has already been released to states for meeting their wage obligation till September, which also includes Rs 12,000 crore (Rs 120 billion) carried forward from last year as pending liabilities.
This leaves the Centre with Rs 14,000-15,000 crore (Rs 140-150 billion) in hand for running the entire programme till the end of this year. This might be enough, if additional demand is not generated this year.
Under the 2015-16 expenditure, based on the estimated person days, the total expenditure should have been more than Rs 60,000 crore (Rs 600 billion).
“We’ll assess the situation after the end of the southwest monsoon season in September to see which are the blocks where rainfall has been insufficient and from where demand for MGNREGS work might come,” said rural development secretary Amarjeet Sinha.
Meanwhile, in a related development, officials said the finance ministry rejected a demand from rural development ministry to raise MGNREGS wages, in line with the recommendations of the Dr Mahendra Dev Committee recommendations.
The rural development ministry, it is learnt, was told that the current average wage rate across the country under MGNREGS was adequate and any revision in them would burden the exchequer.
At present, wages under the scheme vary from Rs 162 to Rs 248 a day. However, in many states, these wages are less than the minimum wages, which the committee had recommended to change and revise every five years.
In a related development, the Centre on Tuesday initiated geo-tagging of all assets created under the rural employment programme to bring transparency and check leakages. Geo-tagging of assets will capture the latitude and longitude of the asset. For this, the rural development ministry signed a memorandum of understanding with the Indian Space Research Organisation on June 24 this year, Sinha said.
Photograph: Jayanta Dey/Reuters