The central government has decided not to allocate additional funds for the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) for the financial year 2024-25, stating that the current budgetary allocation of Rs 86,000 crore should be adequate.

According to a Financial Express report, officials indicated that an unspent balance of around Rs 7,500 crore from the current year’s allocation would help cover expenses for the remaining period.

So far, Rs 82,684 crore—96% of the annual outlay—has already been disbursed. However, actual spending has reached approximately Rs 94,500 crore, partly due to the use of past savings under the scheme.

The government justified its decision by alleging that some relatively “well-off” states were misusing funds, effectively turning the rural employment scheme into an alternative income source rather than its intended purpose of providing jobs to those in need.

“The highest amount the states had drawn was during Covid at about Rs 1.1 lakh crore when rural distress was real. Is Rs 86,000 crore low in normal times and rural demand is relatively doing well,” an official stated.

Meanwhile, Tamil Nadu Chief Minister M.K. Stalin recently wrote to Prime Minister Narendra Modi, urging the Centre to release pending funds without further delay, highlighting concerns over the impact of fund shortages on rural employment.