In 2020-21, the central govt plans to spend much more money than it ever has on the MGNREGS and has increased the allocation by ₹40,000 crore to over ₹1 trillion.
In 2020-21, the central government plans to spend much more money than it ever has on the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) and has increased the allocation by ₹40,000 crore to over ₹1 trillion. Mint analyses if this will be enough.
You might also be interested to read: Explained: MSME Sector Will Find Relief In FM’s Stimulus, But, More Can Be Still Done
Why is so much money needed for MGNREGS?
The government plans to spend ₹1,01,500 crore (see Chart 1) under MGNREGS this fiscal. During an economic upheaval, governments go back to what British economist John Maynard Keynes had suggested: In tough economic times, when the private sector and individuals are not spending money, the government should become the spender of last resort to put money in people’s hands. The ratio of the total amount to be spent under MGNREGS and GDP is 0.45% (see Chart 2). Even after adjusting for growth in the size of the Indian economy over the years, the MGNREGS spending will be the highest since 2014-15.
Source: livemint
