Budget 2012: Ramesh gains, aam admi loses

NEW DELHI: The much-hyped job guarantee scheme seems to have stabilized, with Union budget reducing the allocation after six years of sustained hikes.
Finance minister Pranab Mukherjee announced Rs 33,000 crore as MGNREGA allocation, down from 40,000 crore earmarked last year. The total allocation for rural development schemes has gone up to Rs 99,000 crore.
The downgrading of job scheme was unthinkable in past six years, when Congress positioned job scheme as its key aam aadmi policy measure. While observers said MGNREGA is allocation-neutral since it is a legal guarantee and expenditure incurred has to be met irrespective of funds, Congress has used higher allocations in the war of perceptions to position itself as an aam aadmi party.
The reduced allocation seems to be based on the fall in expenditure in 2011-12 that cost Rs 31,000 crore to the exchequer.
Rural Development minister Jairam Ramesh said the financial cut was aimed to set right the inflated labour budgets sent by states like Jharkhand and West Bengal that they were unable to spend. “But the Centre would have to provide whatever cost the demand-driven MGNREGA incurs,” he said.