A shortage of funds has hit the Mahatma Gandhi National Rural Employment Guarantee Scheme in Orissa.

Atleast four districts--Sundargarh, Nayagarh, Jharsuguda and Kandhamal--are diverting funds from other schemes to meet the expenses.

Under the scheme, the central and the state governments share the cost of implementation of the project in the ratio of 90:10. Orissa had demanded Rs 2,092 crore from the rural development ministry last year of which Rs 1,059 crore were approved. The ministry had released only Rs 147 crore by the end of January. Because of this, the state is facing fund crunch.

The four districts are diverting funds from other schemes as to avoid paying unemployment allowances to MNREGS-beneficiaries, which is due if the government fails to provide jobs under the scheme.

“The state government has to pay unemployment allowance to the beneficiaries in case it fails to provide jobs as per the scheme,” S. N. Tripathy, Orissa's panchayati raj secretary told Governance Now.