Demand for MG-NREGS work remains elevated | The Financial Express

Demand for MG-NREGS work remains elevated

Part of the spurt seasonal, but data also reflects high rural joblessness

Demand for MG-NREGS work remains elevated
More than 2.31 billion person days of work has been generated under the scheme so far this fiscal, compared with 3.6 billion in the whole of last financial year. (File/istock/pixabay)

Demand for work under the Mahatma Gandhi National Rural Employment Guarantee scheme is likely to remain high for a few more weeks, before it starts moderating with the start of the harvest season later this month, analysts said.  Household demand for work shot up to a six-month high of 21.1 million in December 2022 and has remained elevated so far in January too, with 11.1 million seeking work under the scheme in the first 11 days of the month.

Of course, demand for work from households had started slowing since its peak of 31.8 million in June 2022 to 16 million in August. The demand has, however, started picking up again in recent months, reflecting a bleak employment scenario in rural India and an income dip (see chart).

However, employment provided under the scheme has remained much below the demand. In January, about 0.7 million households have been provided work while in December 2022, 17.5 million households were given work under the scheme. 

More than 2.31 billion person days of work has been generated under the scheme so far this fiscal, compared with 3.6 billion in the whole of last financial year.

With rural unemployment also high and rural wage growth seen to be stagnant, the data indicate that the rural job market is yet to come out of the pandemic-related distress. According to CMIE, rural unemployment was at 7.44% in December 2022 as against the all-India unemployment rate of 8.3%. Rural unemployment has remained in same range and wat at 7.3% on January 10.

 Experts believe there will be a let-up in rural unemployment by February when farm labour will be needed.

NR Bhanumurthy, vice-chancellor, Dr BR Ambedkar School of Economics University, Bengaluru, said there is an element of seasonality in job demand under NREGS. With harvest season likely to start mid-January and February, the demand for jobs under the scheme will come down.

He also said that agriculture growth in FY24 is likely to come down after three years of nearly 4 % growth. “Going forward, I doubt we will have that level of comfort as key inputs including land, labour and capital could see a decline. There is a prediction of La Nina as well that could impact rainfall, he said, adding that with construction activity picking up, many rural workers will move to cities.

Further, the mandatory attendance system through the National Mobile Monitoring System App under MG-NREGS from January 1 may also have impacted the numbers.

The government, too, has budgeted for additional allocation under the scheme. An additional net cash outgo of `16,400 core was recently announced under the scheme in the supplementary demand for grants for the fiscal. “This, along with the BE of `0.73 trillion, implies an enhanced outlay of nearly `0.9 trillion for FY2023. Out of this amount, nearly 83% or `0.75 trillion has been utilised till December 27, 2022,” Icra had said in a note last month.

MG-NREGS is a demand-driven scheme for the enhancement of livelihood security of the households in rural areas by providing at least one hundred days of guaranteed wage employment to every household whose adult members volunteer to do unskilled manual work in every financial year.

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First published on: 12-01-2023 at 01:00 IST