Mahatma Gandhi National Rural Employment Guarantee Scheme(MGNREGS)

Mahatma Gandhi National Rural Employment Guarantee Scheme(MGNREGS): Recently, the Central government has capped spending under MGNREGS at 60% of the annual allocation for the first half of FY25- 26. 

• About MGNRES: Launched under the MGNREGA Act in 2005, the Centrally Sponsored Scheme, Ministry of Rural Development.
• Aim: Providing 100 days of guaranteed employment (Right to work) under Article 41.
• Budget Allocation: MGNREGS budget for FY26 is about Rs. 86000 crore.
• Rationale behind MGNREGS spending cap:

o Objective of the Spending Cap: To regulate cash flow through the MEP/QEP mechanism to prevent early exhaustion of funds and avoid mid-year supplementary allocations.

o Chronic Budget Overruns: Historically, over 70% of the MGNREGS budget gets exhausted by September, prompting supplementary allocations in December, which are usually depleted by January.

o Mounting Pending Dues: In the past five years, year-end pending dues have ranged between ₹15,000 crore and ₹25,000 crore. On average, 20% of the next year’s budget goes toward clearing these dues.