The government has decided to expeditiously use the budgetary funds of Rs 50,000 crore from among the outlays for 25 existing schemes to address the plight of migrant workers who have returned to their native villages with ready, remunerative jobs. Under the rural public works scheme Garib Kalyan Rojgar Abhiyaan, to be launched by Prime Minister Narendra Modi on Saturday, rural infrastructure development and asset creation in 116 districts, including in 25 backward ones, spread across six states, will get a boost under a mission-mode 125-day project, involving the labour of over 67 lakh returnee migrants.
The campaign doesn’t necessarily involve any additional budgetary cost, but finance minister Nirmala Sitharaman said any additional allocation required for achieving saturation level of the relevant schemes in these districts would be provided. The Finance Commission funds to the local governments in the 116 districts will be dovetailed with Garib Kalyan Rojgar Abhiyaan.
The idea is to pre-empt any rural distress or famine due to the arrival of lakhs of migrant workers in rural areas via the special Shramik special trains and other means, with tens of thousands getting home on foot. At the same time, given its acute fiscal constraints, the government is apparently keen that these additional needs are being met mostly via fast-tracking of certain expenditure and a wholesale re-prioritisation. Additional budgetary costs, if any, are being minimised.
Apart from budgetary funds, resources from afforestation (CAMPA) fund and district mineral funds could also be put to use to some extent for the mission-mode project.
To ensure that migrant labourers who are back to their villages find enough job opportunities, the government has already allocated an additional Rs 40,000 crore under the MGNREGS for the current fiscal year, over and above Rs 61,500 crore allocated in the Budget for FY21. With the extra outlay, nearly 300 crore person days of jobs are being planned in FY211, as against 265.34 crore person days of work created under the scheme in FY20.
Apparently, there was a sudden surge in MGNREGS jobs since the first week of May. While only 9.15 crore person days were created between April 1-May 10, during the next 20 days, 27 crore person days were created under the scheme. The easing of lockdown started from second week of May. The average jobs/day under MGNREGS increased from 73.6 lakh in 2019-20 to 135.5 lakh in May 11-31, 2020.
The virtual launch of Garib Kalyan Rojgar Abhiyan from Telihar in Bihar’s Khagaria district, is estimated to cover about two-third of such migrant workers in UP, Bihar, Madhya Pradesh, Rajasthan, Jharkhand and Odisha.
To mitigate adverse impact of Covid-19, the Centre recently announced a multi-tranche economic stimulus package Atmanirbhar Bharat worth Rs 21 lakh crore (including Rs 1.7 lakh crore PM Garib Kalyan Yojana or PMGKY announced on March 26), which, according to EY, amounted to 9.8% of FY21GDP.
Only about Rs 2 lakh crore or 10% of this stimulus can be traced as direct additional budgetary cost to the central exchequer.
DK Srivastava, chief Policy Advisor at EY India, wrote: “According to the recently revised Centre’s borrowing programme, the estimated fiscal deficit for FY21 stands at 5.7% of GDP. This may not be enough to cover both the shortfall in Centre’s budgeted tax revenues and the already announced fiscal stimulus. If there is no expenditure compression, Centre’s fiscal deficit may need to be increased to about 7% of GDP”.
