They lost their jobs to demonetisation, but the Union budget has rekindled their hopes.

Union finance minister Arun Jaitley announced on Wednesday that Rs 48,000 crore has been allocated for Mahatma Gandhi National Rural Employment Guarantee Act (MNREGA) for 2017-18, up from just Rs 38,500 crore in the budget of 2016-17. And that increase in central funds for the rural job guarantee scheme has sparked hopes among many labourers, who lost their jobs in factories across the country thanks to the note ban, of income at home.

"I hope that I will get a job in my village itself as more funds will now be available with the village panchayat under MNREGA," said Narayan Ram, 55, a resident of Sultanpur village in Samastipur district. "Earlier, I had to go outside the state in search of jobs as I cannot find a job here."

Narayan, a daily wage earner who has a MNREGA job card, had returned from Delhi after demonetisation in November last year.

His nephew Ganour Ram, 35, a resident of the same village, chipped in: "More fund allocation under MNREGA will accelerate construction activities such as those for fisheries and earth filling works. Increase in work will generate more job days for people like us, which will also result in bringing the poverty level down."

The MNREGA promises up to 100 days of wage employment per year to all rural households whose adult members volunteer to do unskilled manual work. Employment is provided in public works projects at a stipulated wage. Experts have opined that the enhanced budgetary allocation comes in the backdrop of a big spike in demand for work in states like Bihar, which saw a large number of migrant labourers returning from Punjab and other states after demonetisation ravaged the unorganised labour sector.

However, according to a World Bank report published last year, the MNREGA's impact on rural poverty in Bihar was only 1 percentage point against its potential of reducing poverty by at least 14 percentage points. Among the main reasons why the potential was not being realised, the report said, was that the supply side was too slow to respond to the demand for work from the poor, workers were not receiving the full scheme wage, and there were delays in wage payments. In Bihar, the minimum wage under MNREGA for a man is Rs 208 per day and Rs 177 for a woman.

Vashishtha Narayan Singh, an economist from Mithila University, said: "This supply-demand imbalance would be addressed as now more labour will be available in the state."

To drive home his point, Singh said that Bihar reported 1.99 crore person-days of employment in 2016-17 against a target of 4.03 crore.

The World Bank report too said that if MNREGA was implemented effectively, its design would ensure there is no unmet demand for work. The report added that the spike in unmet demand for MNREGA jobs was an indicator of increasing rural distress. It had also called the scheme India's "best bet" for bettering the lives of her rural poor.

According to latest data compiled by the Union ministry of rural development, there are 143 lakh job card holders in Bihar under MNREGA and 20.3 lakh households were provided employment in the last fiscal year.