In a major rejig of the UPA’s flagship Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA), the BJP-led Government has converted the programme from being a Central to a State Plan scheme. This change, however, did not find explicit mention in Finance Minister Arun Jaitley’s Budget speech.

In the previous Government’s 2013-14 Budget, a total amount of ₹33,000 crore had been provided towards MGNREGA as a Central scheme. The current Budget has increased the allocation marginally to ₹33,353 crore but shifted it entirely under the head of State Plan schemes.

This is being seen by many as a move to allow State Governments to implement the scheme in a flexible manner to suit their specific local conditions.

States can use the MGNREGA funds to dovetail it with their own schemes for rural development. Some States, such as Madhya Pradesh, have, in fact, already been doing this.

It uses 60 per cent of MGNREGA funds to pay workers and spends the remaining 40 per cent from the State Budget on procuring building material and for hiring capital equipment for building village roads, schools, panchayat offices etc.

Allocating MGNREGA funds totally under State Plan schemes will further increase the possibilities for States to deploy this money more imaginatively. “If we now do not have to keep worrying about the money coming from the Centre and also can decide on the type of work to be taken up on a decentralised basis, so long as it is compliant with the Act, we welcome this move, ” said Aruna Sharma, Additional Chief Secretary, Panchayat and Rural Development, Madhya Pradesh Government.

Rajasthan’s Chief Minister Vasundhara Raje Scindia had recently sought for employment generated through departmental works to be counted as employment for MGNREGA purposes, while also giving the “State Employment Guarantee Council complete flexibility to include any kind of work as per local needs”.

In his Budget speech, Jaitley made it clear that his government wants to continue with implementing MGNREGA. At the same time, he said that wage employment under the scheme would be provided only through works “that are more productive, asset creating and substantially linked to agriculture and allied activities.”

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