India‘s federal rural development ministry has set up a panel to overhaul its single job guarantee scheme in hopes of channeling more work to the country’s poorer regions, a senior government official said on Friday. The Mahatma Gandhi National Rural Employment Guarantee Scheme, or MNREGA, was in high demand in the Asian nation’s rural areas as they emerged from the pandemic amid soaring inflation and limited non-agricultural job opportunities.
But residents of relatively wealthy states may have done better in securing work under a key anti-poverty jobs program, prompting calls for changes to the scheme, an official told reporters in New Delhi on condition of anonymity. “The panel will recommend institutional mechanisms, including governance and administrative structures, for more effective use of funds, especially to address poverty,” the official said.
For example, states like Bihar and Odisha’s spending under the jobs scheme lags behind states like Tamil Nadu and Rajasthan, which have higher per capita income, government data shows. The panel, which is expected to submit its report by January, will examine the expenditure trends in various states and identify the reasons for the variations, the official added.
The federal Department of Rural Development, which administers the program, did not immediately respond to a request for comment. Government spending on job guarantees is among the largest social sector expenditures it has a budget for. New Delhi has earmarked 730 billion Indian rupees ($8.94 billion) for the jobs program for the 2022-2023 fiscal year, down from a record allocation of 1.1 trillion rupees in 2020-2021.
However, the allocation could be increased in the last quarter of this fiscal year. Reuters reported that the government may increase rural spending by 2 trillion rupees in the next fiscal year. The MNREGA jobs program, which was introduced more than 15 years ago, allows citizens to apply for jobs such as building roads, digging wells or creating other rural infrastructure and receive minimum wages for 100 days each year. The panel now aims to revamp the job opportunities available under the scheme, the official added. The overhaul of the system comes at a time when unemployment in rural India has remained above 7% for most of the current fiscal year, according to data from the Center for Monitoring Indian Economy (CMIE), a private think tank.
