The government will likely allocate about INR 88,000 crore for the rural employment guarantee scheme in the interim budget for FY25 to be presented on February 1, as compared with INR 60,000 crore budgeted for this fiscal, a person aware of the details told ET.
The government will allocate more should the demand exceed its initial expectation under the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS), which is a demand-driven programme.
The rural development ministry, in the pre-budget consultations, had sought INR 1.1 lakh crore for FY25, expecting higher demand for work and wage hikes.
As for the current fiscal, the government has approved an additional INR 14,524 crore, over and above the budgeted INR 60,000 crore, as part of its first batch of supplementary demands for grants with an indication that more funds could be granted if required. The government had spent about INR 90,000 crore under the scheme in FY23.
Of the enhanced outlay, INR 71,051 crore has been released so far this fiscal, showed the official data.
More people sought work under the MGNREGS until December this fiscal year from a year before, mainly due to an erratic monsoon that prevented the usual migration of workers to farming coupled with a tentative industrial recovery, experts have said.
Work demand from individuals under the MGNREGS rose over 3% until December this fiscal year from a year before to almost 260 million, thanks to elevated demand between July and October.
The demand came from nearly 207 million households from April through December, recording a more than 6% increase from a year earlier. An up to a 10.4% increase in wage rates under the MGNREGS also raised expenditure.
Work demand for MGNREGS has moderated in the past two months amid heightened economic activity.
