Budget 2019 Highlights: How will new Budget help create employment

Publish Date: February 01, 2019

In a major boost to employment generation, Interim Finance Minister Piyush Goyal has proposed hiking the allocation of funds under the Mahatma Gandhi National Rural Employment Generation Act (MGNREGA) scheme to Rs 60,000 crore. This is a 9% jump, or over Rs 5000 crore more than the funds allocated in the Union Budget 2018-19.

The MGNREGA is the flagship scheme of the government; guaranteeing the ‘right to work’ and generating employment among unskilled labourers in rural India. Under MGNREGA, 100 days of unskilled manual work is provided to labourers in India’s villages.

While presenting the budget, Goyal said, “We ensured that everybody gets food and nobody sleeps with an empty stomach. We have worked to bridge the urban-rural divide in the country. We are allocating Rs 60,000 crore for MGNREGA.”

“Under Pradhan Mantri Gram Sadak Yojana (PMGSY), the construction of roads has tripled,” he added. However, the funds allocated for creating employment under this scheme has remained the same as last year, at Rs 19,000 crore.

Additional funding

Interestingly, Goyal assured that more funds could be added to the MGNREGA funds if the need arose. It may be noted that in January 2019 the government of India added Rs 6000 crore to the flagship employment generation scheme, on top of the budgetary allocation of Rs 58,403.69 crore for FY 2018-19. This was an attempt to meet the employment demand in the rural sector.

The funds allocated under MGNREGA has seen a progressive increase since Union Budget 2014-15, when it stood at Rs 37,588.03 crore; the next year’s budget hiked it to Rs 43,380.72 crore, which was further ramped up to Rs 57,386.67 crore in 2016-17. Union Budget 2018-19, however, saw only a marginal rise in MGNREGA funds at Rs 58,403.69 crore.

MGNREGA Past Performance

MGNREGA, launched in 2006, is considered India’s largest social security and employment generation scheme. Under it, the government builds productive assets like roads, canals, and water bodies using unskilled manual labour in rural areas. This also includes work availability for poor households in the construction of their own houses under Pradhan Mantri Awaas Yojana - Gramin (PMAY-G).

As per the figures available with the Ministry of Rural Development, till 30th October 2018, MGNREGA generated 142 crore person-days of work in FY 2018-19. The scheme made 92% of wage payments within the first 15 days of the financial year.

By: Sandhya Kannan, Head – Content