PM-KISAN savings may be shifted to MGNREGA

This is to push liquidity into rural hands to kick-start consumption cycle

To push liquidity into rural hands to kick-start the consumption cycle, the government may divert a part of the unspent fund allocated under PM-KISAN scheme for 2019-20 to the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA).

Officials said because of the lower number of targeted beneficiaries under PM-KISAN expected this year than anticipated earlier based on the 2015-16 agriculture census, the Centre may end up saving ~20,000-25,000 crore in the flagship scheme, out of the budgeted ~75,000 crore.

“A part of this may be diverted for MGNREGA,” a senior official said.

Sources said the rural development ministry has sought an additional ~20,000 crore for MGNREGA for 2019-20 over and above the budgeted ~60,000 crore for 2019-20.

Though, all of the PM-KISAN savings may not be transferred to fund MNGREGA’S extra needs, sources said a part of this could be transferred.

“A fund for MGNREGA might be through the supplementary demand for grants. The idea is to put more money into rural hands in the short run. It is the most effective way to boost demand and consumption,” the official quoted above added.

Officials said extra funds for MGNREGA could be used to meet extra demand (which may increase after the rabi sowing) or to increase wages.

Officials said up to September 2019, of the allocated ~60,000 crore under MGNREGA, around ~48,396.81 crore has been released by the Centre, which includes dues from 2018-19. This is almost ~4,629.61 crore more compared to the same period last year.

Up to the middle of October 2019, around 1.52 billion person days of work had been provided under MGNREGA, which is almost the same as in 2018-19.

In 2018-19, the Centre had, in total, provided 2.67 billion person days of work, while the projected was 2.56 billion person days.

Officials who spoke to Business Standard made it clear that the Centre’s rural budget will not be cut back to help meet a challenging fiscal deficit target for 2019-20.

In PM-KISAN, the Centre had allocated ~75,000 crore for 2019-20 based on the assumption that around 145 million

The Centre may end up saving ~20,000-25,000 cr in the flagship PM-KISAN scheme, out of the budgeted ~75,000 crore farmers will get enrolled into the scheme.

But, sources said so far over 76 million farmers have got enrolled under the scheme.

“At best, this number will go upto to 100-110 million farmers by end of 201920 because in many places, farmers don’t have proper land records, while in some cases, states haven’t come forward to enlist their farmers,” a senior official said.

Of the 76 million farmers enrolled for PM-KISAN, up to November 3, around 71.7 million have received the first installment of ~2,000, while 61.2 million have got the second installment and just around 36.5 million have enrolled for the third enrollment.

Under the scheme, arrears aren’t paid to farmers who couldn’t register on time.