Rs 4,000 crore NREGA boost to fight note ban woes

New Delhi: The government has received Parliament’s approval to increase funding to MGNREGA — India’s flagship rural job scheme — by Rs 4,000 crore, a major relief for a large number of demonetisation-hit casual labourers and small-time workers.  

Labourers and workers have been forced to move from cities to native villages after the government’s move last month to scrap high-value currency sparked a crippling cash crunch and job losses. The government had moved the proposal anticipating a spike in demand for rural jobs.

Under the Mahatma Gandhi National Rural Employment Guarantee Act or MGNREGA, villagers can enroll for work building roads, digging wells or creating other rural infrastructure and receive the minimum wage for 100 days a year.

After Parliamentary nod last week for the remaining quarter of the current fiscal, the total spend on MGNREGA will go up to Rs 47,000 crore for 2016-17, the highest-ever allocation for the scheme in any financial year since its inception in 2005.

While the move will help generate more jobs, it is also likely to help the BJP-led government at the Centre deal with political rivals ahead of next year’s Assembly elections in Uttar Pradesh.

The government’s November 8 currency replacement move has hit India’s rural economy, prompting an unrelenting Opposition attack and disrupting an almost entire Parliament session.  

The Narendra Modi government has been particularly concerned over demonetisation’s negative impacts on small businesses and industries like gems and jewellery, carpets, bangles, brassware, tobacco and many other sectors as many people involved in them have lost jobs.

The scramble for cash has caused a string of deaths, and long queues have stayed outside low-on-cash banks and ATMs, about five weeks after the Centre’s demonetisation announcement to fight black money and fake currency.

With the Uttar Pradesh elections round the corner, the ruling NDA may highlight the increased funding for MGNREGA to send a message to the voters that the scheme remains its top priority.

The NDA government will try to aggressively project additional funding for the scheme as a major issue during the election campaign in Uttar Pradesh as the state not only has a large migrant population spread across the country, it is also home to the carpet, bangle and brassware manufacturing hubs of Mirzapur, Firozabad and Moradabad, respectively.

Since MGNREGA envisages jobs to be given on demand to create assets in villages, millions of jobless workforce, which is returning to their native places, will seek work under the scheme, thus leading to a surge in job demands, sources aware of the development, told this newspaper.

The additional fund will help the Union rural development ministry to cope with the expected increase in demand for jobs in rural areas.