Rural development and MGNREGS

Growth in allocation on rural development is largely driven by increased outlays in department of rural development, which includes some major programmes on rural employment generation and infrastructure creation like rural roads and housing. Allocations for department of land resources and drinking water supply although show an increasing trend over the years, the growth rate for drinking
water supply has tapered down considerably since 2007-08 with only department of land resources showing growth rate similar to that experienced in years 2008-09 and 2009-10.
Detailed Demand for Grants (various years), Ministry of Rural Development,
Expenditure Budget Vol. II, Union Budget 2010-11.
Department of Rural Development: Major Programmes/ Schemes
Department of rural development, which has seen the bulk of allocation in rural development sector operates major schemes for rural employment (NREGS/MGNREGS), rural livelihood and entrepreneurship (SGSY), rural housing (IAY) and rural roads (PMGSY). The general trend in growth of allocation across all the schemes is uneven. It is noteworthy that beneficiary-driven schemes like NREGS, SGSY and IAY saw a significant rise in allocation in 2008-09 when UPA-I Centre for Budget and Governance Accountability, 2010 was nearing completion of its tenure. Strikingly, the allocations in IAY and SGSY hardly saw an increase in the following years. For the present budget, rise in allocations in these schemes is miserly with only SGSY recording a significant increase of 27 percent.

Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS/ NREGS)
Essentially being a demand-driven scheme, the utilization in NREGS depends on its effective implementation. The allocation for the scheme increased substantially in the first four years of its implementation given that with better implementation, off take from the scheme would also significantly increase. However, it has also been widely observed that in most of the states, the scheme has not been able to provide the guaranteed minimum days of employment to a large number of beneficiaries. The reasons are varied ranging from ineffective implementation to
paucity of funds at the district level. On the other hand, with the economy yet to gather momentum out of a recession, lack of any substantial increase in allocation as per 2009-10 (RE)and 2010-11 (BE) betrays a lack of sense of urgency by Govt towards rural employment generation.