‘Decision pending on release of funds of Rs. 7,888 crore to Bengal under PMAY-G’

NEW DELHI: The decision to release funds amounting to Rs 7,888.67 crore to West Bengal under the Pradhan Mantri Awaas Yojana-Gramin (PMAY-G) during the current financial year (2024-25) is pending with the “competent authority”, a Parliamentary panel was informed.

The Ministry of Rural Development told this to the Standing Committee on Rural Development and Panchayati Raj. During its examination of the demand for grants (2025-26) of the Department of Rural Development, the committee enquired about the “reasons for variation” in the allocation of various rural development schemes, including PMAY-G, at budgetary estimates (BE), revised estimate (RE), and advance estimates (AEs). The department informed the committee that the PMAY-G budgetary allocation for 2024-25 was Rs 54,500.14 crore at the BE stage, which decreased to Rs 32,426.33 crore at the RE stage and Rs 17,731.96 crore at the AE stage.

Among the “reasons for low expenditure” under the PMAY-G, the department listed the following: “i. Progress and subsequent expenditure were affected in the scheme due to General Election/assembly elections. ii. Maximum amount was released to the States/UTs in the last quarter of FY 2023-24, which is being utilised by States in the current year, affecting the expenditure under PMAY-G in Q1 of FY 2024-25. iii. Decision on the release of funds amounting to Rs 7,888.67 crore to West Bengal in the current FY is pending with the competent authority. iv. The scheme got an extension for the construction of an additional two crore houses in the second quarter of the current FY only, and after approval of the competent authority, new targets were also allocated to States/UTs in September 2024. This delays the release of funds under the scheme.”

After the department’s reply, the Parliamentary committee has “strongly” recommended that West Bengal be paid its rightful dues for all eligible years, except for the year currently under dispute in court.

The Committee observed from the data on physical and financial progress provided by the Ministry that no central funds have been released to West Bengal under MGNREGA and various other schemes for FY 2022-23, 2023-24, and the current financial year.

In its report, the committee said, “The continued suspension of funds has resulted in severe consequences, including a sharp increase in distress migration and disruptions in rural development initiatives. This has had a significant adverse impact on the livelihoods of rural populations, exacerbating economic hardships in the state.” Additionally, the Committee, headed by Congress MP Saptagiri Sankar Ulaka, said, “The pending payments must be released without delay to ensure that ongoing rural development projects are not stalled and that intended beneficiaries do not suffer due to financial constraints.”

The Centre has suspended the release of funds to West Bengal under the Mahatma Gandhi National Rural Employment Guarantee Scheme for the past three years. It has also suspended the release of funds to West Bengal under the PMAY-G.

The Centre, invoking section 27 of the MGNREGA 2005, had stopped the release of funds to West Bengal with effect from March 9, 2022, “due to non-compliance with directives of the Central Government”. Since then, no work under the scheme has taken place in the state.

The Committee said that suspension of funds to West Bengal under MGNREGS and other schemes has led to “severe consequences”, including a sharp increase in distress migration and disruptions in rural development initiatives. It also voiced concern over the ministry’s funds remaining underutilised.

The panel also said that there is stagnation of funds in the flagship Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS). The committee is concerned to note that the budget estimates under MGNREGS for FY 2025-26 have remained unchanged at Rs 86,000 crore since the revised estimates for 2023-24.

“The committee is unable to comprehend the rationale for not increasing the allocation of funds under MGNREGA since 2023-24,” it said, urging the rural development ministry to look afresh into the requirements for fund allocation.

As MGNREGS is a demand-driven scheme, the funds can be raised at the revised estimate stage accordingly, the panel said.

“The committee, therefore, recommends that the Department of Rural Development apprises itself of the still existing high demand for jobs under MGNREGA at the ground level more realistically, and press upon the finance ministry for increased allocation to MGNREGA,” it said. The panel also raised concern over the rural development ministry not fully utilising its funds.

Against funds worth Rs 1,73,804.01 crore allocated at the revised estimate stage of 2024-25, the actual expenditure was Rs 1,13,284.55 crore only, which was 34.82 per cent less than the allocated funds, the panel said. “This indicates that either the budgetary planning of the government was not prudent enough, or there was a problem at the actual implementation stage of the schemes,” it said. As per the latest financial review, the accumulated unspent funds under the Pradhan Mantri Awas Yojana-Gramin is Rs 15,825.35 crore, Pradhan Mantri Gram Sadak Yojana Rs 3,545.77 crore, National Social Assistance Scheme Rs 1,813.34 crore, National Rural Livelihood Mission Rs 2,583.16 crore, and for MGNREGS, it is Rs 1,627.65 crore, the panel said.

“The committee strongly recommends that the Department of Rural Development develop innovative strategies and adopt a more effective approach to enhance fiscal prudence,” it added.