The Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) promises 100 days of wage-based employment every year to rural households across the country. As per independent reports, demand for work under this scheme has been increasing. But in the 2023-24 Union Budget, the government has slashed allocation for this scheme to ₹61,032.65 crore, which is 30% less than the revised estimate of ₹ 89,154.65 crore for 2022-23. This is the lowest ever allocation as a percentage of the GDP, at less than 0.2%.

This is the second straight cut, as in the 2022-23 budget also the allocation was reduced by 25%. So, what are the government’s justifications for these budget cuts? How do they relate to ground realities? Is there a danger of demand suppression through insufficient budgeting, as claimed by MGNREGA advocates? 

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