Elevated demand for work, missed rural infra targets: Centre may hike allocation for rural development

Pradhan Mantri Gram Sadak Yojana seeks to provide all-weather road connectivity to unconnected habitations in rural India.

In yet another pandemic year, when income disparity between the haves and the have-nots has widened and livelihood challenges continue, the job of the department of rural development has come into sharp focus.

This Central department is responsible for formulating and implementing policies on poverty alleviation, employment generation, rural infrastructure and rural housing. After a record allocation in the first pandemic year, 2020-21, the budgetary allocation for the department had been slashed by nearly a third in the current fiscal year.

But, with demand for manual jobs under the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) surging even in this fiscal and other schemes of the department also possibly needing higher spending, it is likely that at the revised estimates stage, the finance ministry may allocate more funds in the upcoming Budget 2022.

According to an analysis by PRS Legislative Research, the expenditure of the department grew 11.3 percent annually in the last decade. In 2020-21, the department was allocated Rs 120,147 crore, which increased by two-thirds or Rs 77,229 crore at the revised estimates (RE) stage.

Some prominent welfare schemes the rural development department helms are the MGNREGS, Pradhan Mantri Gram Sadak Yojana (PMGSY) and the Pradhan Mantri Awaas Yojana (PMAY).

MNREGS: More than 50 paise of every rupee allocated by the finance ministry to the department of rural development is spent on the rural job guarantee scheme, which provides 100 days of manual work a year to at least one member of every rural household.

In 2020-21, the first pandemic year when widespread lockdowns forced migrant workers to return to villages and seek work under MGNREGS, allocation has to be raised to the highest ever of Rs 111,500 crore at RE stage. But the BE for 2021-22 was still Rs 73,000 crore and subsequently, the Centre has had to allocate more funds to this scheme.

In any case, since 2015-16 which was the second year of the NDA government’s first term, annual budgetary allocation has never been sufficient to provide work to all the people who demand work under this scheme. The RE figure has always exceeded the BE.

For 2022-23, activists are demanding another record allocation, of Rs 1.5 lakh crore, at the BE stage since demand for work in rural areas has remained high and not everyone who gets work is paid in time. Arrears of the previous year get settled after the BE amount arrives. Also, while the act guarantees 100 days of work, employment has been provided for less than 50 days a year in the last five years.

PMAYG: Pradhan Mantri Awaas Yojana (Gramin) deals with Central assistance in providing housing for the rural poor. Its urban chapter aims to fulfil the housing need of the urban poor. Implementation of PMAY (G) stated in 2016, the second year of the NDA government’s first term, with a target of constructing 30 million new rural housing units by 2022. But as per the department’s latest data, only about 18.23 million housing units were targeted for completion this fiscal. PMAY (G) scheme accounts for the second highest allocation under the department of rural development.

A Parliamentary standing committee, which was examining the demand for grants by the department, has made some scathing observations about the difference in Central assistance being provided for housing units under this scheme to rural versus urban areas. This committee has also pulled up the department for missing the target for 2020-21 (6.376 million housing units) by a wide margin since just about a third were actually constructed. “The committee apprehends that with this pace of house construction the target for ‘Housing for All’ by 2022′, which is not very far, is hardly achievable,” it said in a report.

PMGSY: Pradhan Mantri Gram Sadak Yojana seeks to provide all-weather road connectivity to unconnected habitations in rural India. A press statement from the ministry in November last year stated that PMGSY-I was started to provide connectivity to unconnected habitations of population size 500+ in the plains and 250+ in the North-East and Himalayan states.

In selected left-wing extremism blocks, habitations of 100+ population were also to be provided connectivity. Out of 646,000 kilometres of road and 7,523 bridges which were to be built under this program, 20,950 km road length and 1,974 bridges remain. Since 2016-17, the actual expenditure on this program has been less than budgetary allocation each year, with the lowest spending in FY21 at just 70 percent of the allocation.

The standing committee report quoted earlier has also raised several overarching issues plaguing implementation of welfare schemes under the department of rural development. Take the shortage of technical manpower at the Panchayat level. This hampers implementation of all these prominent schemes.

Then, MGNREGS suffers from delayed wage payments and widespread wage disparity across states; PMGSY has trouble with unscrupulous contractors winning bids at lower amounts and the building substandard roads whereas under PMAY (G), apart from the lower payment compared to the urban scheme, there are also difficulties in finding land parcels on which to build housing for the rural poor.