No lack of funds for MNREGA: Ramesh

New Delhi: Allocation for UPA`s ambitious MNREGA scheme may have come down in the Union Budget but there would be no lack of funds for the rural job programme, Rural Development Minister Jairam Ramesh said today.

The allocation for the scheme entitling employment to poor rural households has been reduced from Rs 40,000 crore in 2011-2012 to Rs 33000 crore in the Budget presented by Finance Minister Pranab Mukherjee for 2012-2013. However, Ramesh maintained there was no dearth of funds with an amount of Rs 42000 crore which includes an opening balance of Rs 6000 crore lying with the states and the states` contribution of Rs 3000 crore available for the programme.

"Rs 6000 is the opening balance. Pranab Mukherjee has allocated Rs 33000 crore. Roughly 10 per cent–Rs 3000 crore– is the state government contribution. So in 2012-2013, about Rs 42000 crore we can spend, which is more than adequate considering what is the performance in the state government," he told PTI. Ramesh owed the responsibility for the reduced budget allocation for the MNREGA.

"Now, people are criticising the Finance Minister. In fact, I was the one who asked for a reduced MNREGA budget. I wrote a letter to the Finance Minister requesting to reduce the MGNREGA budget and give that money to me for water supply and sanitation," Ramesh said.

Stating that MNREGA is a demand driven programme, he said, "Whatever demand arrives, we are legally obliged to fulfil." The Minister also rejected allegations that the reduction in the allocation has downsized the importance of the flagship programme. Observing that Rs 42000 crore can be spent over MNREGA in 2012-2013, Ramesh said, "So where is the slashing of funds. There is no slashing of funds."

Noting that it was very difficult to have a realistic assessment of labour budget, he said, "In 2011-2012, the total labour budget that had been projected by all the state governments was Rs 60,000 crore. The actual anticipated expenditure will be about Rs 38,000 crore. Labour budget is artificially inflated by the state governments."

"In 2011-2012, Rs 40000 crore was our contribution. Rs 4000 crore is the state`s contribution. The national allocation for MNREGA in 2011- 2012 would be Rs 44000 crore. As opposed to Rs 44000 crore, actual expenditure is Rs 38,000 crore," he said. "If the monsoon is good, the labour demand automatically falls," he said.

Asked whether the demand by the Agriculture Ministry which demanded a moratorium on the scheme during the peak agriculture season was reason for the reduction in MNREGA funds, the Minister said the Rural Development Ministry had "clearly rejected" it and there were no two views on the issue. Ramesh said the report by the Planning Commission member Mihir Shah Committee had suggested addition of 30 new works to MNREGA, "Which we have accepted and they have rejected the recommendations of the Agriculture Ministry."

Though, funds allocation for MNREGA has come down, the budget has proposed an increase of Rs 8000 crore in the total allocation for rural development including drinking water supply and sanitation. Last year, the total allocation for Rural Development which includes drinking water supply, sanitation and the National Social Assistance Programmes (NSAP) was Rs 91000 crore. This year, the proposed allocation for the sector has been increased to Rs 99000 crore.