NREGA unspent funds to cheer up Centre

In a year when the government is facing a severe cash crunch,windfall savings under its flagship Mahatma Gandhi National Rural Employment Guarantee Scheme may provide some succour. States are estimated to have nearly Rs 15,000 crore as unspent balance under the scheme left over from last fiscal.

We estimate that states have about Rs 15,000 crore left from 2010-11. We have written to them to let us know the exact amount of unspent money they have. Accordingly,their allocation for the current fiscal will be fixed, a finance ministry official said,adding that this would result in net savings for the government in 2011-12. States are expected to surrender unspent balances before getting fresh allocation.

The Centre had allocated Rs 40,100 crore to the scheme in last fiscal and has provided an almost identical Rs 40,000 crore to it in the current fiscal.

MGNREGS is a last resort for people when they do not get any jobs. With the economy doing largely well and better employment available,we expect that the demand for jobs under the scheme could be lower, the official said,adding that the government could save as much as Rs 18,000 crore from the schemes allocation in 2011-12. This would spell good news for the Centre which is trying hard to control its expenses and meet fiscal deficit target of 4.6 per cent of the GDP in 2011-12.