The Center is looking at extending the flagship Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) to the urban areas, as thousands have been left jobless due to the nationwide lockdown for over two months.

Sanjay Kumar, Joint Secretary in the Ministry of Housing and Urban Affairs, said that the flagship scheme which guarantees jobs in the rural areas could be launched in the smaller cities with an initial cost of about Rs 35,000 crore amid a record 23.9 per cent contraction in the economy.

“The government has been considering this idea since last year,” he told news agency Bloomberg. “The pandemic gave a push to this discussion.” The move will also boost demand as it will enhance the purchasing power of the lakhs of people.

The total allocation on MGNREGA for the current financial year over Rs 1 lakh crore at present.

While Finance Minister Nirmala Sitharaman had allocated Rs 61,000 crore towards MGNREGA in the Union Budget—lower than the revised estimate of Rs 71,001.81 crore in 2019-20—she announced an additional Rs 40,000 crore as part of the Rs 20 lakh crore package in May to provide employment to the migrant laborers who returned to the native villages during the lockdown.

More than 27 crore people are currently covered under the MGNREGA. Bloomberg also reported that since April this year, over 16.9 crore person days worth of employment has been provided under the scheme.

https://www.bloombergquint.com/economy-finance/covid-19-economic-package-mnrega-budget-raised-to-an-all-time-high-of-rs-1-lakh-crore

There has been a growing clamor for extension of the program to the urban areas as well.

“There has been rising concern over the urban poor. While there are schemes for the rural poor, many of them do not cover the urban poor. At a time, when lakhs have lost their jobs, it is crucial to immediately implement an employment guarantee scheme which gives a cushion to the urban poor,” an expert said..