India May Use 1 February Budget to Bolster Statutory Rural Job Guarantee Scheme

New Delhi (Sputnik): Indian Finance Minister Nirmala Sitharaman will table her second budget in Parliament on 1 February. Faced with the challenge of pulling the Indian economy out of stagflation, Sitharaman also has to ensure fiscal stability. India’s GDP growth has slowed in recent years while inflation has risen.

The rural economy is likely to remain the focus area of the upcoming national budget with sources indicating that Indian Finance Minister Nirmala Sitharaman may increase the statutory job guarantee scheme MNREGS for by about 23 percent for the coming year. 

A source close to the development told Sputnik that the allocation for the current financial year is most likely to be revised upwards from $8.45 billion in last year's budget, to $10.42 billion.

Mahatma Gandhi National Rural Employee Scheme (MNREGS), launched in 2005 by the Congress led United Progressive Alliance (UPA) government, aims to provide a minimum of 150 days of employment as a manual labour to a member of a rural household.

“Higher allocation is aimed at giving a push to the rural economy. Rural sector will get additional allocation. Allocations may be enhanced for rural roads and rural housing,” the source said.

Government sources have also told Sputnik that the allocations for rural infrastructure are also likely to rise with potentially more spending on rural housing and roads.